WTI crude price slides to $56.95 as OPEC+ output surge fuels oversupply concerns
Crude oil slips to $56.95 as output hikes outweigh geopolitical tension
West Texas Intermediate (WTI) crude oil extended its selloff early Monday, falling 3% to $56.95 per barrel in the Asian session after OPEC+ confirmed a second consecutive month of aggressive output increases. The alliance, led by Saudi Arabia, announced it will raise production by 411,000 barrels per day (bpd) in June, signaling a deliberate acceleration in supply despite market volatility and recessionary demand risks.
Saturday’s OPEC+ decision follows an earlier surprise hike in May and could return as much as 2.2 million bpd to the market by November. The move comes as Saudi Arabia reportedly seeks to pressure overproducing members by allowing prices to drop further. Crude has already endured its steepest monthly loss since 2021, weighed by global growth concerns and U.S. tariffs under President Donald Trump, which have amplified fears of a trade-driven recession.
The renewed supply influx is testing market resilience at a time when inventories remain elevated and macroeconomic signals continue to flash caution. June’s additional 411,000 bpd increment adds to growing unease about an impending surplus, particularly as global refinery demand struggles to absorb the potential increase in crude flow.
USOIL price dynamics (March 2025 - May 2025) Source: TradingView.
Middle East tensions offer only limited price support
Geopolitical unrest in the Middle East has done little to offset the bearish pressure. On Sunday, Israel's Prime Minister Benjamin Netanyahu vowed to retaliate against the Houthis following a missile strike near Israel’s main airport. Iran's Defense Minister warned Tehran would respond to any aggression from Israel or the U.S., further stoking tensions in an already volatile region.
However, oil markets have largely shrugged off these geopolitical headlines, focusing instead on structural oversupply signals.
Also as previously discussed, the combination of accelerating OPEC+ production and weakening demand continues to dominate trader sentiment, with little indication that price support will materialize without a fundamental supply rebalancing
