International oil prices fell as much as 3% on Thursday after the wider OPEC+ cartel decided to increase production in August only by the amount it plans to, without giving details on how move from September.
The decision was made despite the particularly “pressured” global offer.
The global benchmark, Brent oil for September delivery It fell $3.42, or 3%, to settle at $109.03 a barrel, with the August contract, which expires today, down 1.3% at $114.81 a barrel. On the other side of the Atlantic, the US WTI crude for August deliverylost $4.02, or 3.7%, to close at $105.76 a barrel.
Brent ended the first half of the year up 48%, the second quarter up 6%, but recorded losses of 6.5% for June.
US crude ended the first half of the year up 41%, gaining 5.5% in the second quarter, after losing 7.8% in June.
Based on its decision, OPEC+ will increase the total production of its members by 648,000 barrels per day in both July and August.
Sanctions on Russian oil imposed over Russia’s invasion of Ukraine have given prices a big boost, pushing up inflation further and heightening fears of a global recession.
The fall in the prices of the “black gold” was intensified by the clearing of “positions” by traders before the three-day holiday for the national anniversary of the 4th of July in the USA.
“People are taking money off the table,” said Phil Flynn, an analyst at Chicago-based Price Futures Group.
Further supply disruptions, however, could limit price falls, amid disruptions to Libyan crude deliveries from two ports in eastern Libya, while Ecuador’s output has been hurt by ongoing protests in the Latin American country.
Due to strikes that have been announced for July 5 in mining fields in Norway, about 4% of Norwegian production will stop from that day.
Russian Deputy Prime Minister Alexander Novak also said that an external cap on the price at which Russian oil is imported from third countries could push prices higher.
Natural gas in Europe also posted its biggest monthly rise since September 2021 in June, amid Russian supply cuts that are weighing on businesses and forcing governments to plan for possible shortages.
The price increase for June reached 54%. Moscow’s cuts immediately put pressure on the market, despite lower weather-related demand in the summer and an increase in liquefied natural gas (LNG) imports.
The Dutch natural gas contract for August delivery, benchmark for Europe, closed up 3.1%, at 144.51 euros per megawatt hour. Its British bond closed up 1.4%.