Oil fell as fears of oversupply increased after OPEC's report on increasing production
A state of pessimism currently dominates the oil scene, and oil prices witnessed a noticeable decline with the opening of the week, influenced by escalating fears of an imminent global oversupply, following reports indicating that the OPEC alliance is moving to boost its production, along with the resumption of Iraqi Kurdistan oil exports.
West Texas Intermediate crude fell to the level of 64.70 dollars per barrel.
Brent crude oil fell by 1.2% to 68.40 dollars per barrel.
Basic pullback catalysts:
- Expectations of an increase in OPEC production
The OPEC alliance is likely to approve a new increase in production of at least 137 thousand barrels per day during its meeting scheduled for next Sunday. This trend has raised analysts ' fears that the alliance's strategy is shifting towards regaining market shares at the expense of price management and ensuring market balance, which portends a long-term oversupply.
- The return of Iraqi Kurdistan exports
These concerns increased as the Kurdistan region of Iraq resumed crude oil exports through Turkey over the weekend, after a two-and-a-half-year hiatus, adding new crude inflows to a market that appears to be heading towards surplus.
Geopolitical risks
Despite the downward pressure, traders are still closely monitoring the risk of supply disruptions from Russia, one of the world's largest producers, amid continuing tensions between Moscow and NATO, which could be a supporting factor for prices if tensions escalate.
