3 hours ago 2

Oil prices expected to drop below $60 on increasing OPEC+ supply

Wall Street analysts predict oil futures will fall below $60 per barrel by the end of the year as the Organization of the Petroleum Exporting Countries (OPEC) and its allies boost output.

OPEC+ has been unwinding output cuts this year as it seeks to recover global market share. Over the weekend, the group announced it would boost production by 548,000 barrels per day in August. This marks OPEC+'s fourth consecutive monthly increase and was larger than analysts anticipated.

"Saturday's announcement to accelerate supply hikes suggests that the strategic shift to normalizing spare capacity and market share, supporting internal cohesion, and disciplining US shale supply is continuing," Goldman Sachs analysts Daan Struyven and his team said in a research note on Sunday.

Struyven and his team noted resilient demand, particularly from the world's largest oil importer, China. The analysts anticipate OPEC+ will increase production yet again in September.

"We keep our price forecast with Brent averaging $59 in 2025Q4 and $56 in 2026," Struyven wrote.

NY Mercantile - Delayed Quote USD

As of 1:26:13 PM EDT. Market Open.

CL=F BZ=F

On Sunday, BNP Paribas analysts lowered their year-end Brent forecast by $5 to $55 per barrel, but they said that they foresee a recovery in the oil market in 2026.

"The main driver for that is that we expect supply growth – from both OPEC and non-OPEC – to moderate," the analysts said in a note.

Crude prices have fallen following a brief spike to near $80 on the heels of the Israel-Iran war last month.

During the conflict, Wall Street analysts had outlined worst case scenarios, predicting prices could surge into the triple-digit range of $120-$130. However, their base cases ultimately anticipated lower prices by year-end.

A ceasefire between Israel and Iran announced late last month by President Trump erased oil's war risk premium. WTI is down nearly 3% year to date. Brent is down 5% during the same period.

On Monday, West Texas Intermediate crude (CL=F) was trading at roughly $67 per barrel, and Brent crude (BZ=F), the international benchmark, was above $69 per barrel. This represented a less than 1% increase in crude futures.

"All in all, the supply picture definitely looks to be elevating; however, the stronger demand is remaining above expectations as well, hence the choppy trade," Dennis Kissler, senior vice president at BOK Financial, said in a note on Monday.