U.S. crude oil futures rose about 3% on Monday after OPEC+ increased production at a steady rate, easing investor fears that the group might boost output even faster.
West Texas Intermediate futures rose $1.73, or 2.85%, to close at $62.52 per barrel. Global benchmark Brent gained $1.85, or 2.95%, to settle at $64.63 per barrel. Prices are also finding support as the U.S. rig count fell every week in May and has hit its lowest level since 2021.
Eight producers in OPEC+, led by Saudi Arabia, agreed on Saturday to increase production by 411,000 barrels per day in July, the third consecutive month the group will boost output at that rate.
“There were market concerns of a faster unwind process,” Giovanni Staunovo, commodity analyst at UBS, told clients in a note Saturday. “For now, the oil market remains tight, indicating it can absorb additional barrels.”
OPEC+ is bringing oil back to the market after cutting 2.2 million barrels per day. So far, the group has agreed to return 1.2 million bpd of those cuts. OPEC+ is likely raising its production quotas to where its real output stands, said Peter Boockvar, chief investment officer at Bleakley Financial Group.
U.S. crude prices are down nearly 13% this year as supply increases while President Donald Trump’s tariffs are depressing demand expectations. But shale producers such as Diamondback Energy have warned that U.S. production will fall if prices do not rise. Falling U.S. production should ultimately boost prices, Boockvar said.
“We’re in the process of seeing low prices cure low prices,” Boockvar told CNBC. “Oil prices here at $60 is dirt cheap, and we’re about to see an inflection point here to the upside here.”
Goldman Sachs expects OPEC+ to implement a final production increase of 411,000 bpd in August. The investment bank sees a surplus of 1 million bpd this year and 1.5 million bpd in 2026.
Goldman is maintaining its oil price forecast of $56 per barrel for U.S. crude this year and $60 for Brent. The bank sees U.S. crude prices falling to $52 in 2026 and Brent pulling back to $56.
