OPEC+ Nears Fifth Consecutive Output Hike Amid Eased Middle East Tensions

Oil prices declined after their largest weekly drop in two years amid expectations that OPEC+ will increase oil production by 411,000 barrels per day in August, marking the fifth consecutive monthly hike. This production increase, aimed at reversing previous cuts, has raised concerns about a potential global oil glut, limiting further price gains despite easing Middle East tensions and a fragile Iran-Israel ceasefire. President Trump indicated possible support for sanctions relief on Iran contingent on peaceful behavior, which contributed to reducing the geopolitical risk premium in the market. Although oil prices have fallen from their June highs above $80 a barrel, they remain on track for a second consecutive monthly gain, supported by a weaker dollar and a strong stock market rally reflecting confidence in economic demand. Analysts note that while OPEC+ production rises, some market tightness persists due to limited output increases by certain members and stable exports. Key factors influencing oil prices going forward include OPEC+ decisions, global demand uncertainty, especially from China, and the durability of the ceasefire in the Middle East.