Oil News: OPEC+ Agrees to Larger Output Hike, Traders Watch for Potential Price Drop

OPEC+ Cranks Up Production Again: What Traders Need to Know

OPEC+ just announced another big production hike on July 5th – 548,000 barrels per day starting in August. This is the latest in a series of aggressive increases that started in April, and it’s keeping oil prices pinned at four-year lows.

The Numbers That Matter

Total increases since April: 1.8 million bpd (they’ve unwound 82% of their cuts)

Current Brent: Around $68, WTI at $66.50

Price target: Goldman sees Brent hitting $60 this year, $55 next year

Market surplus: JPMorgan forecasts 1.3 million bpd oversupply in 2025

Why This Matters for Your Trades

Saudi Arabia is done playing nice with price support. They’re going after U.S. shale producers who need $65+ oil to stay profitable, while the Saudis can pump at $10/barrel. This isn’t about short-term price management anymore – it’s about market share warfare.

The Saudis are also sending a message to quota cheaters like Kazakhstan and Iraq: comply or watch us flood the market. Kazakhstan basically told OPEC to stuff it, so now they’re getting punished along with everyone else.

What the Smart Money is Saying

Wall Street is uniformly bearish. Every major bank has slashed forecasts:

Goldman: $60 Brent for 2025

JPMorgan: Expects 1.3M bpd surplus

Morgan Stanley: Cut to $62.50

UBS: Trimmed forecasts despite calling markets “tight”

Supply is growing 1.8M bpd while demand is only up 720K bpd. That math doesn’t work for bulls.

Trading Environment

Volumes were light during the announcement due to July 4th holiday, but the underlying trend is clear. WTI has been trading in a $54-79 range this year with elevated volatility as traders figure out OPEC’s new game plan.

Energy stocks are lagging badly – the sector is way behind the S&P 500’s 28% gains. Even the strong names like Exxon (+13%) and Chevron (+5%) are underperforming.

The Bottom Line for Traders

This isn’t a temporary dip – OPEC+ has fundamentally changed strategy. They’ve got 4.6 million bpd of spare capacity and they’re willing to use it to squeeze competitors.

Key levels to watch:

Support around $65 for Brent has been tested multiple times

Break below $60 could trigger another leg down toward Goldman’s targets

Any demand surprises from China could provide temporary relief, but structural oversupply remains

The trend is your friend, and right now that trend is down. OPEC+ can pause these increases if markets get too loose, but they’ve shown they’re committed to this path. Trade accordingly.

More Information in our Economic Calendar.