Oil prices declined on Monday as easing geopolitical tensions in the Middle East and expectations of another OPEC+ production hike in August bolstered supply outlooks, even as concerns over global demand lingered.
Brent crude futures slipped by 13 cents (0.19%) to $67.64 a barrel by 0344 GMT, ahead of the August contract’s expiration. The more actively traded September contract dropped 18 cents to $66.62.
U.S. West Texas Intermediate (WTI) crude also fell, losing 32 cents (0.49%) to settle at $65.20 a barrel.
Despite recording their largest weekly losses since March 2023 last week, both benchmarks are poised to post gains of over 5% for June—marking their second straight monthly rise.
Oil prices had surged above $80 a barrel during a brief 12-day conflict that began on June 13, when Israel struck Iranian nuclear sites. Prices then retreated sharply to $67 after President Donald Trump announced a ceasefire between Iran and Israel.
According to IG Markets analyst Tony Sycamore, much of the geopolitical risk premium that had driven prices higher has since dissipated.
Adding further pressure, four OPEC+ sources indicated the group plans to raise production by 411,000 barrels per day in August, following similar monthly increases since May. The alliance, including non-OPEC partners, is scheduled to meet on July 6 to finalize its next steps—marking what would be the fifth monthly hike since April’s start of production tapering.
Still, oil markets remain under pressure from demand-side concerns, particularly linked to China’s economic slowdown.
“Uncertainty around global growth continues to cap prices,” noted Priyanka Sachdeva, senior market analyst at Phillip Nova.
China’s manufacturing activity shrank for the third consecutive month in June, amid soft domestic demand, weak exports, and continued U.S.-China trade tensions.
Meanwhile, U.S. oil production may slow slightly, as Baker Hughes reported a drop of six active oil rigs last week, bringing the total to 432—the lowest since October 2021.
