London – Oil prices surged over $1 a barrel on Monday after OPEC+ opted for a moderate production increase of 411,000 barrels per day (bpd) for July, easing market concerns about a potential larger supply boost.
Brent crude futures rose by $1.34, or 2.13%, to $64.12 per barrel by 03:46 GMT, recovering from Friday’s 0.9% decline. U.S. West Texas Intermediate (WTI) crude gained $1.52, or 2.5%, to reach $62.31 a barrel, after a 0.3% dip in the previous session. Both benchmarks had ended last week over 1% lower.
The decision marks the third consecutive month in which the OPEC+ group—comprising the Organization of the Petroleum Exporting Countries and its allies—has raised output by the same volume, targeting a balance between market stability and discipline among members. The group reportedly refrained from a steeper hike to avoid unsettling the market.
“Had they gone through with a surprise larger amount, then Monday’s price open would have been pretty ugly indeed,” said Harry Tchilinguirian of Onyx Capital Group.
Analysts say the 411,000-bpd increase had already been priced in, and the move is partly aimed at penalizing members such as Iraq and Kazakhstan for consistently breaching output quotas. Kazakhstan, according to Russian news agency Interfax, has notified OPEC it will not curb its production.
Goldman Sachs expects OPEC+ to implement a final 0.41 million bpd increase in August, citing strong global demand, tight spot fundamentals, and seasonal summer factors supporting consumption. The group is set to review August production levels at its July 6 meeting.
Meanwhile, U.S. supply concerns persist as gasoline demand spikes heading into the summer driving season. ANZ analysts noted a significant increase of nearly 1 million bpd in implied gasoline demand—one of the top three weekly surges in the past three years.
Adding to the bullish sentiment, U.S. crude production may face headwinds from falling rig counts. Baker Hughes reported on Friday that the U.S. oil rig count declined for a fifth straight week, dropping by four to 461—its lowest level since November 2021.
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Traders remain alert to U.S. inventory levels and potential disruptions during what is forecast to be an above-average Atlantic hurricane season.
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