Global oil prices continue to decline in response to the prospect of further production increases by OPEC+ countries and concerns about slowing economic growth amid the potential return of elevated U.S. tariffs. Analysts predict that the price of oil could drop to $60 per barrel in the coming months.
This is reported by Finway
Market Dynamics and OPEC+ Position
On Tuesday, July 1, Brent crude oil fell by 30 cents, reaching $66.44 per barrel, while the price of U.S. WTI decreased by 33 cents to $64.78 per barrel. Experts cite the anticipated increase in oil production by OPEC+ countries in August as the main reason for the price drop. According to ANZ’s senior commodity strategist Daniel Hynes, the market is currently extremely sensitive to the actions of the alliance, which may accelerate the pace of production increases.
“The market is currently concerned that the OPEC+ alliance will continue its accelerated production increase.”
Four sources within OPEC+ reported that the alliance plans to raise oil production by 411,000 barrels per day in August following similar decisions in May, June, and July. If these plans are realized, OPEC+ will increase production by 1.78 million barrels per day over the year, which accounts for more than 1.5% of global demand. A crucial meeting of the alliance countries is scheduled for July 6.
Impact of Changes in U.S. Tariff Policy and Future Predictions
Another factor putting pressure on oil prices is the likelihood of increased U.S. tariff rates. U.S. Treasury Secretary Scott Bessen warned that countries may receive notices of sharp tariff increases, as the period of suspension for elevated tariffs on U.S. trading partners, set by President Donald Trump, is nearing its end.
Morgan Stanley analysts believe that by the beginning of next year, Brent crude oil futures could drop to $60 per barrel. This forecast is based on the expected oversupply and a reduction in geopolitical risks following de-escalation between Israel and Iran. In 2026, an oversupply of oil is expected to exceed demand by 1.3 million barrels per day.