Oil prices fell more than $2 per barrel on May 5 as OPEC+ intends to further accelerate oil production growth, raising concerns about increasing supply in the market.

According to Reuters, Brent crude futures fell by $2.21 to $59.08 per barrel, while US WTI crude cost $56 per barrel, $2.29 less than before, Ukrinform reports .

Both contracts hit their lowest levels since April 9 at the opening of trading on Monday after OPEC+ agreed to accelerate oil production growth for a second consecutive month, increasing output in June by 411,000 barrels per day (bpd).

It is noted that the increase in production in June from eight countries will lead to a total cumulative increase in production for April, May and June of 960,000 b/d, which is a 44% reduction from the 2.2 million b/d agreed from 2022.

OPEC+ sources said the group could completely cancel its voluntary cuts by the end of October if its members do not improve compliance with their production quotas.

Saudi Arabia is also pushing for OPEC+ to accelerate the rollback of previous production cuts to punish fellow OPEC members Iraq and Kazakhstan for failing to meet their production quotas.

Barclays and ING also lowered their forecasts for the price of Brent crude oil following the OPEC+ decision.

Barclays cut its Brent price forecast by $4 to $66 per barrel in 2025 and by $2 to $60 per barrel in 2026, while ING expects the average Brent price this year to be $65, down from $70 previously.

“We now expect OPEC+ to gradually phase out additional voluntary adjustments by October 2025, but we also expect some slowdown in US oil production growth,” Barclays analyst Amarpreet Singh said in a note.

According to him, the net impact of OPEC+ production growth and US production declines increased Barclays’ estimate of 2025 supplies by 290,000 barrels per day for 2025 and 110,000 barrels per day for 2026.

ING analysts led by Warren Patterson said that the global oil balance is expected to deepen into surplus during 2025.

As reported, oil prices rose on May 2 after China said it was ready to negotiate with the United States on tariffs , raising hopes of a de-escalation in the trade war between the world’s two largest economies. Джерело: https://censor.net/n3550414

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