Oil Prices Slide as OPEC+ Weighs Yet Another Output Increase

Prices Slip Ahead of OPEC+ Decision

Oil prices declined by around 1% on Thursday, compounding the prior day’s 2% drop, as markets eyed a weekend OPEC+ virtual meeting where a proposal to boost production for October is under discussion. Brent crude fell to $66.96 a barrel, while U.S. West Texas Intermediate dipped to $63.33.

Unwinding Cuts to Reclaim Market Share

OPEC+ has already reversed about 2.2 million barrels per day (bpd) in cuts since April and granted the UAE an extra 300,000 bpd quota. Now, they are considering tapping an additional 1.65 million bpd, a move aimed at reclaiming market share, even during a traditionally weaker demand season.

DBS Bank analyst Suvro Sarkar warned that while the market has absorbed prior supply hikes during the third quarter, the real test will come with potential inventory gluts during winter.

Inventory Buildup Fuels Risk

Further pressure came from U.S. crude data: API tracking reported a rise of 622,000 barrels in weekly stockpiles, rising sharply against expectations for a 2 million-barrel draw.

Broader Market Impacts

Financial markets are digesting layered signals: sustained output increases, cooling demand, and inventory accumulation. Fading growth indicators in the U.S. align with weakening oil benchmarks, while OPEC+ is uncomfortably betting that $60–$65 is becoming their new tolerance range.

Analysts caution that increased OPEC+ production may threaten U.S. shale profitability, potentially slowing domestic supply growth.

Supply Glut Concerns Grow

A recent Reuters poll of analysts projects Brent crude to average around $67.65/b this year due to persistent excess supply and tepid global demand. Forecasts remain cautious for 2025-26, signaling a grim near-term outlook for oil prices.

The Bottom Line

Oil continues its downward slide amid OPEC+ supply concerns, rising U.S. inventories, and weak demand signals. With a weekend decision pending, markets brace for growing winter supply pressure, testing the resilience of prices already under stress.