OPEC+ Agrees to Increase Oil Production in July despite Causing Price Drop

OPEC+ agreed on Saturday to increase oil production in July by 411,000 barrels per day, the same level as in May and June, as the group of oil-producing countries continues to restore supplies at a faster pace than previously planned.

US crude futures fell on Friday amid concerns that OPEC+ may increase its oil production for July by more than previously expected.

Brent crude futures fell 0.34% to $63.93 a barrel. US West Texas Intermediate (WTI) crude was last down 0.34% at $60.73 a barrel, after earlier falling more than $1 a barrel.

At these levels, the benchmark contracts for the previous month are on track for weekly losses of more than 1%.

Latest Oil Prices:

WTI Crude         $60.79  -0.25%

Brent Crude      $62.78  -0.90%

Murban Crude  $62.11 -1.15%

Louisiana Light $64.69  +1.70%

Bonny Light       $78.62  -2.84%

Mars US             $72.21  -1.45%

Gasoline             $2.015 -0.022 

Natural Gas       $3.447  -2.13%

Eight OPEC+ members have increased their production at a faster pace than planned since May, even though the oversupply has weighed on prices.

Saudi Arabia and Russia, which lead the OPEC+ alliance, are seeking to punish their allies who are partially overproducing and regain market share.

On Saturday, the eight countries agreed to the July increase in an online meeting. An OPEC+ delegate said they also discussed other options. On Friday, sources familiar with the OPEC+ talks said they may discuss a larger increase.

In a statement issued after the meeting, OPEC+ cited "the stable global economic outlook and currently sound market fundamentals, as reflected in the decline in oil inventories" as the reason for the July increase.

OPEC+ pumps about half of the world's oil and includes OPEC members and allies such as Russia. While the eight countries are increasing their supply, some are being asked to ease those increases to compensate for the overproduction of recent months.

The July increase from the G8 will bring the total increase for April, May, June, and July to 1.37 million barrels per day, representing a 62% reduction from the group's latest production cut of 2.2 million barrels per day, according to Reuters calculations.