Oil futures are falling amid a possible increase in OPEC+ production

Brent crude oil prices fell 1.6% after reports of a possible increase in OPEC+ production in July. This prospect has increased concerns about oversupply amid moderate demand growth. The news appeared against the background of preparations for the OPEC+ meeting, which will be held on June 1 and may lead to a third consecutive increase in production.

The considered production expansion amounts to 411 thousand barrels per day, which is about 1% of the total production volume of the alliance and significantly exceeds previously approved figures. This proposal follows similar decisions to ramp up production in May and June, which has already put pressure on oil prices, triggering their decline.

Officially, OPEC+ representatives say that an increase in production is necessary to meet growing global demand. However, sources within the organization point to other, unofficial motives.: the desire to regain market share, strengthen discipline among participating countries that violate quotas, as well as the possible influence of political factors.

Saudi Arabia, which plays a key role in OPEC+, has repeatedly expressed dissatisfaction with non-compliance with quotas from countries such as Iraq and Kazakhstan. In particular, Kazakhstan has not yet taken significant steps to reduce production amid the activity of international oil companies operating on its territory, which keeps exports close to record levels.