West Texas Intermediate (WTI) crude oil prices showed signs of recovery during Asian trading on Tuesday, stabilizing at approximately $57.60 per barrel following a nearly 2% drop on Monday. However, the potential for further gains remained constrained by mounting concerns over a growing global oil supply, fueled by OPEC+’s decision to accelerate output increases.
Last week, OPEC+—the alliance of the Organization of the Petroleum Exporting Countries and its partners—agreed to boost production for the second consecutive month, announcing an additional increase of 411,000 barrels per day (bpd) for June. This uptick, driven by eight member countries including Russia, brings the total production rise for April, May, and June to 960,000 bpd, effectively reversing nearly 44% of the 2.2 million bpd in cuts implemented since 2022, according to estimates from Reuters.
Sources within OPEC+ indicated that the group could fully reverse its voluntary cuts by October if compliance with output quotas does not improve. Saudi Arabia is reportedly urging a faster rollback of these cuts to penalize Iraq and Kazakhstan for repeatedly failing to meet agreed-upon production targets.
David Wech, chief economist at energy analytics firm Vortexa, highlighted that concerns over a potential global recession and weak demand for refined fuel are contributing to the downward pressure on oil prices. Wech also pointed out that since mid-February, global crude inventories have increased by approximately 150 million barrels, with crude stored both in onshore tanks and on tankers at sea, further dampening market sentiment.
