Oil dips more than $2 as OPEC+ production hikes continue

Reuters reports that oil prices lost more than $2 a barrel during early Asian trade on Monday. The decline was driven by the intention of the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to accelerate production hikes.

Prices of both Brent and WTI reached their weakest level since April 9 after OPEC+ agreed to boost crude output by 411,000 barrels per day next month, the news agency says.

Reuters calculates that the total increase in production for April, May, and June will hit 960,000 barrels per day. This accounts to about 44% of the various reductions amounting to 2.2 million barrels per day agreed by the group starting in 2022.

Tim Evans of Evans on Energy says OPEC+ decision to raise crude production quotas next month adds to fears of a supply surplus in the market. Besides, the cartel could completely unwind voluntary cuts by late October, Reuters reports.

Meanwhile, Barclays lowered its outlook for Brent crude prices by $4 to $66 a barrel this year and by $2 to $60 a barrel next year due to the acceleration of OPEC+ production increases.