Oil prices saw a downturn on Tuesday, influenced by the anticipation of an OPEC+ output increase in August and worries about an economic slowdown stemming from potential higher U.S. tariffs. Brent crude futures for September delivery dipped by 16 cents, or 0.24 percent, settling at $66.58 a barrel by 00:00 GMT. Brent crude is currently trading above $66.45.Â
West Texas Intermediate crude saw a decrease of 20 cents, or 0.31 percent, bringing it to $64.91 a barrel, currently trading above $64.74. “The market is now concerned that the OPEC+ alliance will continue with its accelerated rate of output increases,” Reuters reported, quoting ANZ senior commodity strategist Daniel Hynes.
According to four OPEC+ sources speaking to Reuters last week, the group intends to raise output by 411,000 barrels per day in August, following similar increases in May, June, and July. If approved, this would elevate OPEC+’s total supply increase for the year to 1.78 million bpd, which is more than 1.5 percent of global oil demand. OPEC and its allies, including Russia, collectively referred to as OPEC+, will convene on July 6.
Morgan Stanley’s future predictions
Concerns regarding U.S. tariffs and their potential impact on global growth also kept oil prices in check. U.S. Treasury Secretary Scott Bessent cautioned that countries might receive notifications of significantly higher tariffs despite ongoing good-faith negotiations as the July 9 deadline approaches. On this date, tariff rates are scheduled to revert from a temporary 10 percent level to President Donald Trump’s previously suspended rates of 11 percent to 50 percent, announced on April 2.
Morgan Stanley predicts that Brent futures will retrace to around $60 by early next year, citing a well-supplied market and a decrease in geopolitical risk following the de-escalation between Israel and Iran. The firm anticipates an oversupply of 1.3 million bpd in 2026. A 12-day conflict that commenced with Israel targeting Iran’s nuclear facilities on June 13 led to a surge in Brent prices, which exceeded $80 a barrel after the U.S. bombed Iran’s nuclear sites, only to drop to $67 following Trump’s announcement of a ceasefire.
Recent weekly declines
Oil prices also saw a decline on Monday, driven by reduced geopolitical risks in the Middle East and the expectation of another OPEC+ output increase in August, which supported supply forecasts amid persistent uncertainties regarding global demand.
Brent crude futures fell by 13 cents, or 0.19 percent, settling at $67.64 a barrel by 03:44 GMT (currently trading above $66.60), just before the expiration of the August contract later that day. The more actively traded September contract was recorded at $66.62, down 18 cents.
In the United States, West Texas Intermediate crude decreased by 32 cents, or 0.49 percent, reaching $65.20 a barrel (currently trading above $65.15). Last week, both benchmarks experienced their largest weekly decline since March 2023; however, they remain on track to conclude June with a second consecutive monthly gain exceeding 5 percent.
The 12-day conflict that began with Israel targeting Iran’s nuclear facilities on June 13 triggered a surge in Brent prices, which soared above $80 a barrel after the U.S. bombed Iran’s nuclear sites, only to retreat to $67 following President Donald Trump’s announcement of a ceasefire between Iran and Israel.
