Oil prices fell 1% on Monday as an easing of geopolitical risks in the Middle East and the prospect of another OPEC+ output hike in August boosted the supply outlook.
Brent crude futures fell 66 cents, or 0.97%, to $67.11 a barrel by 0031 GMT, ahead of the August contract’s expiry later on Monday.
The more active September contract was at $65.97, down 83 cents.
U.S. West Texas Intermediate crude dropped 94 cents, or 1.43%, to $64.58 a barrel.
Last week, both benchmarks posted their biggest weekly decline since March 2023, but they are set to finish higher in June with a second consecutive monthly gain of more than 5%.
A 12-day war that started with Israel targeting Iran’s nuclear facilities on June 13 caused Brent prices to surge above $80 a barrel after the U.S. bombed Iran’s nuclear facilities and then slump to $67 after President Donald Trump announced an Iran-Israel ceasefire.
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The market has stripped out most of the geopolitical risk premium built into the price following the Iran-Israel ceasefire, IG markets analyst Tony Sycamore said in a note.
Further weighing on the market, four delegates from OPEC+, which includes allies of the Organization of the Petroleum Exporting Countries, said the group was set to boost production by 411,000 barrels per day in August, following similar-size output increases for May, June and July.
OPEC+ is set to meet on July 6 and this would be the fifth monthly increase since the group started unwinding production cuts in April.
In the U.S., the number of operating oil rigs, an indicator of future output, fell by six to 432 last week, the lowest level since October 2021, Baker Hughes said.
