Oil Turns Lower on Report OPEC+ to Consider Fresh Supply Boost
(Bloomberg) -- Oil fell after a report that the OPEC+ alliance will consider a fresh round of production increases when the group meets over the weekend.
West Texas Intermediate crude fell 2.5% to settle just below $64, erasing its gain from Tuesday. The OPEC+ development was compounded by softer-than-expected US economic data that dented longer-term consumption expectations.
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Saudi Arabia and its partners have yet to decide how to proceed after completing the fast-tracked addition of 2.5 million barrels a day that was finalized at its previous gathering, several delegates said on Wednesday. Earlier, Reuters reported that the group will consider further raising output at a meeting on Sunday. When OPEC+ last met, Bloomberg reported that the group would consider all options on output, and that remains the case, according to one of the delegates.
Prices clawed back some losses after US President Donald Trump told reporters that he hasn’t yet advanced to “phase two” or “phase three” after he penalized India for purchasing Russian oil. Moscow’s flows have been in focus amid US efforts to achieve peace in Ukraine by targeting India, while Kyiv ramps up drone strikes on Russian energy infrastructure.
The cartel has surprised traders several times this year by embarking on a strategy to reclaim market share, despite the expectation that supplies outside of the group will surge toward the end of 2025. Those increases are expected to leave the oil market heavily oversupplied in the fourth quarter.
Any fresh OPEC+ additions could exacerbate that surplus, though there are questions about the exact volume the group might add.
“OPEC has clearly shifted course this year, and while I don’t dismiss their interest in capturing market share or aligning with Trump, they risk flying too close to the sun by rolling back cuts into seasonally softer demand,” said Rebecca Babin, a senior energy trader at CIBC Private Wealth Group, adding that her base case is that OPEC won’t boost output further at this stage.
The discussions come amid a heightened focus on geopolitics. Away from the Ukraine front, Trump has also deployed naval assets to Venezuela in an apparent push against drug trafficking.
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