Oil Prices Are Holding Steady. Why the OPEC+ Output Hike Isn’t a Problem.

Oil Prices Are Holding Steady. Why the OPEC+ Output Hike Isn’t a Problem.

The price of oil was stable on Monday despite a larger-than-expected increase in production by the Organization of the Petroleum Exporting Countries and its allies. Seasonal demand and doubts about the actual increase in output explain the muted reaction.

Eight OPEC+ countries said they would increase production by 548,000 barrels a day, above the 411,000 barrels a day forecast by analysts. However, the price of Brent crude oil was up 0.5% at $68.64 a barrel early Monday while West Texas Intermediate, the U.S. benchmark, was down 0.1% at $66.91 a barrel.

What’s keeping prices down? First, healthy domestic demand in the Middle East due to high power needs for air conditioning in summer.