Oil prices ease as OPEC+ boosts output targets

ISLAMABAD: (Web Desk) – Oil prices edged lower on Monday after OPEC+ agreed to raise its production targets further from August, while oil exports through the Strait of Hormuz continued to recover, easing concerns over global supply disruptions.

Brent crude futures fell 24 cents, or 0.33 per cent, to $71.88 per barrel in early Asian trade after gaining 0.45 per cent on Friday. US West Texas Intermediate crude also declined 11 cents, or 0.16 per cent, to $68.58 a barrel.

Asian stock markets traded mixed as investors weighed last week’s rebound in technology shares against concerns that artificial intelligence-linked valuations may have risen too quickly. Attention is now shifting towards the upcoming corporate earnings season, which is expected to offer a clearer picture of companies’ spending plans and expected returns from AI investments.

OPEC+ Oil Output Increase Fails to Lift Global Supply

Tokyo, Seoul, Singapore and Sydney were lower in early trading, while Hong Kong, Shanghai, Wellington and Taipei posted modest gains. Seoul’s Kospi index swung sharply, moving from an early gain of nearly two per cent to a loss of more than two per cent.

The AI sector remains the key focus for investors, particularly after major technology companies including Alphabet Amazon Meta and Microsoft said they plan to invest more than $725 billion in the industry this year.

Market sentiment received support from Taiwan-listed Hon Hai Precision Industry, also known as Foxconn, after it reported stronger-than-expected sales growth for April to June and forecast further expansion. The company has diversified from assembling iPhones into manufacturing AI servers for Nvidia, as well as electric vehicles and robots. Its shares climbed more than six per cent in Taipei.

Investors are also closely watching the expected Wall Street listing of South Korean chipmaker SK hynix, which is expected to raise about $29 billion on Friday.

Oil prices extended their decline as more tankers resumed passing through the Strait of Hormuz, while hopes of progress in US-Iran peace talks reduced the immediate geopolitical risk premium.

However, SPI Asset Management analyst Stephen Innes warned that lower crude prices may take time to translate into broader economic relief, as higher freight, transport and consumer costs could continue affecting inflation.

Bank J Safra Sarasin chief economist Karsten Junius said oil exports remain below pre-war levels and supply bottlenecks could persist. He added that efforts to rebuild strategic and commercial reserves may keep demand supported, with oil prices likely to remain in the $75 to $80 range over the next year.