U.S. crude oil prices fall more than 4% after OPEC+ agrees to surge production in June

Following OPEC+’s decision to boost production for a second consecutive month, U.S. crude oil futures dropped by over 4% on Sunday. At the opening of trading, U.S. crude was at $55.80 per barrel, down $2.49, while the global benchmark Brent fell to $58.90 per barrel, a decrease of $2.39. This year, oil prices have fallen by more than 20%.

Saudi Arabia and the seven other producers in the group agreed on Saturday to increase output by 411,000 barrels per day in June. This decision follows the surprise move by OPEC+ to raise production by the same amount in May. The production hike in June is nearly three times higher than what was initially forecast by Goldman Sachs, who predicted an increase of 140,000 barrels per day. In total, OPEC+ plans to introduce over 800,000 barrels per day of additional supply to the market over two months.

The oil market experienced its largest monthly loss since 2021 in April, partly due to concerns over U.S. President Donald Trump’s tariffs potentially leading to a slowdown in demand. Concurrently, OPEC+ is ramping up supply swiftly, causing further pressure on prices. Oilfield service companies like Baker Hughes and SLB anticipate reduced investment in exploration and production this year due to the unfavorable price environment.

Baker Hughes CEO Lorenzo Simonelli highlighted that factors like an oversupplied oil market, escalating tariffs, uncertainty in Mexico, and subdued activity in Saudi Arabia are collectively inhibiting international upstream spending levels. Major oil companies Chevron and Exxon reported lower first-quarter earnings compared to the same period in 2024, mainly due to the decline in oil prices.

Goldman Sachs projects that U.S. crude and Brent prices will average $59 and $63 per barrel, respectively, throughout the year.