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- WTI price advances even as global supply concerns mount after OPEC+ moves to accelerate production hikes.
- The OPEC+ has pledged an additional 411,000 barrels per day (bpd) increase for June.
- Oil prices remain vulnerable due to recession worries and sluggish demand for refined fuel imports.
West Texas Intermediate (WTI) crude Oil price continues to recover during Asian trading on Tuesday, hovering around $57.60 per barrel after a nearly 2% decline on Monday. However, gains were capped by concerns over rising global supply following an OPEC+ decision to accelerate output increases.
Last week, OPEC+, the Organization of the Petroleum Exporting Countries and its allies, agreed to ramp up production for a second straight month, announcing an additional 411,000 barrels per day (bpd) increase for June. This increase, contributed by eight members including Russia, brings the combined rise for April, May, and June to 960,000 bpd—effectively reversing 44% of the 2.2 million bpd in cuts implemented since 2022, according to Reuters estimates.
Sources within the group told Reuters that OPEC+ could fully reverse its voluntary cuts by the end of October if compliance with output quotas does not improve. Saudi Arabia is reportedly pressuring the group to accelerate the rollback of cuts to penalize Iraq and Kazakhstan for their repeated failure to meet agreed production targets.
David Wech, chief economist at energy analytics firm Vortexa, told Reuters that recession fears and soft demand for refined fuel imports are also dragging on Oil prices. Wech noted that since mid-February, global crude inventories have increased by roughly 150 million barrels, stored both in onshore tanks and aboard tankers at sea.
