Oil Jumps After OPEC+ Supply Hike as Geopolitical Concerns Rise
Oil surged after OPEC+ increased production less than some had feared and geopolitical concerns flared in Ukraine and Iran.
The Organization of the Petroleum Exporting Countries and its allies agreed on Saturday to add 411,000 barrels a day of supply in July, but some members objected, including Russia. With a handful of countries lobbying for a pause in July, banks are now split on how many more hikes will come in subsequent months.
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Monday’s gain — West Texas Intermediate crude added as much as 5.1% before easing alongside broader markets — is also likely being aided by an unwinding of bearish bets made in advance of the decision. The group had been considering returning even more volume late last week, and speculative short positions in global benchmark Brent already were the highest since October prior to the meeting.
“The worst of the fears was laid to rest,” said Keshav Lohiya, founder of consultant Oilytics. “Brent shorts are now at the highest level in 2025, which makes sense given the bearish headlines coming out of OPEC. However, this is creating a recipe for a spike if spot healthy market fundamentals continue to roll on.”
In London, benchmark Brent crude futures have been hovered near $65 a barrel since the middle of May as robust short-term fundamentals counter expectations of an oversupply later in the year. Alongside OPEC+’s output hikes, oil has taken direction from the fortunes of the trade war between the US and China, which threatens to sap consumption this year.
Source: Bloomberg
