Oil prices slipped more than 1 per cent on Monday after OPEC+ surprised markets by hiking output more than expected in August, raising concerns about oversupply.
Brent crude futures fell 80 cents, or 1.2 per cent, to $67.50 a barrel by 0010 GMT, while US West Texas Intermediate crude was at $65.68, down $1.32, or 2 per cent.
The Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, agreed on Saturday to raise production by 548,000 barrels per day in August.
“The increased production clearly represents a more aggressive competition for market share and some tolerance for the resulting decline in price and revenue,” said Tim Evans of Evans Energy in a note.
The August increase represents a jump from monthly increases of 411,000 bpd OPEC+ had approved for May, June and July, and 138,000 bpd in April.
OPEC+ cited a steady global economic outlook and healthy market fundamentals, including low oil inventories, as reasons for releasing more oil.
The decision will bring nearly 80 per cent of the 2.2 million bpd voluntary cuts from eight OPEC producers back in the market, RBC Capital analysts led by Helima Croft said in a note. However, the actual output increase has been smaller than planned so far and most of the supply has been from Saudi Arabia, they added.
In a show of confidence in oil demand, Saudi Arabia on Sunday raised the August price for its flagship Arab Light crude to a four-month high for Asia.
Goldman analysts expect OPEC+ to announce a final 550,000 bpd increase for September at the next meeting on August 3.
Separately, the United States is close to finalising several trade agreements in the coming days and will notify other countries of higher tariff rates by July 9, US President Donald Trump said on Sunday, with the higher rates scheduled to take effect on August 1.
