U.S. crude oil futures fell more than 2% on Monday, after OPEC+ agreed to surge production for a second month.
U.S. crude was down $1.55, or 2.66%, at $56.74 a barrel by 10:26 a.m. ET. Global benchmark Brent fell $1.45, or 2.37%, to $59.84 per barrel. Oil prices have fallen about 20% this year.
The eight producers in the group, led by Saudi Arabia, agreed on Saturday to increase output by another 411,000 barrels per day in June. The decision comes a month after OPEC+ surprised the market by agreeing to surge production in May by the same amount.
The June production hike is nearly triple the 140,000 bpd that Goldman Sachs had originally forecast. OPEC+ is bringing more than 800,000 bpd of additional supply to the market over the course of two months.
Oil prices in April posted the biggest monthly loss since 2021, as U.S. President Donald Trump’s tariffs have raised fears of a recession that will slow demand at the same time that OPEC+ is quickly increasing supply.
“Our key conviction remains that high spare capacity and high recession risk skew the risks to oil prices to the downside despite relatively tight spot fundamentals,” Daan Struyven, Goldman’s head of oil research, told clients in a Sunday note. The investment bank cuts its forecast for U.S. crude prices this year by $3 to $56 per barrel.
Oilfield service firms such as Baker Hughes and SLB are expecting investment in exploration and production to decline this year due to the weak price environment.
“The prospects of an oversupplied oil market, rising tariffs, uncertainty in Mexico and activity weakness in Saudi Arabia are collectively constraining international upstream spending levels,” Baker Hughes CEO Lorenzo Simonelli said on the company’s first-quarter earnings call on April 25.
Oil majors Chevron and Exxon reported first-quarter earnings last week that fell compared to the same period in 2024 due to lower oil prices.
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