Oil prices slumped sharply on Monday after the OPEC+ alliance of oil-producing countries agreed to increase production for a second month in a row.
The OPEC+ group of producers, led by Saudi Arabia and Russia, on Friday said it would add 411,000 barrels a day to the market next month. The announcement after an online meeting of the countries, which was brought forward from Monday, followed the larger-than-planned output rise, also of 411,000 bpd, for May.
The group said it has taken the decision to increase crude output “in view of the current healthy market fundamentals, as reflected in the low oil inventories”.
The OPEC+ decision follows the December 5 agreement to start a gradual and flexible return of the 2.2 million barrels per day voluntary adjustments that started from April 1.
“The gradual increases may be paused or reversed subject to evolving market conditions. This flexibility will allow the group to continue to support oil market stability,” OPEC said in the statement.
However, the accelerated hike in the output, together with US trade tariffs that has dampened economic growth expectations, has clouded demand outlook for crude, dragging prices below $60 a barrel to a four-year low.
“Crude futures were back on a slippery slope early Monday in response to Saturday’s decision by the OPEC+/non-OPEC group of eight members to accelerate the phase-out of their production cuts for a second consecutive month,” Singapore-based oil consultancy Vanda Insights wrote in a note on its website.
Oil prices have already been under pressure, with Brent trading near $61 a barrel last Friday, a four-year low. The OPEC+ decision sent prices tumbling another 6%, compounding bearish sentiment triggered by trade war fears and weakening economic data.
Goldman Sachs responded by slashing its December 2025 oil forecast by $5 to $66 for Brent and $62 for WTI, citing both rising OPEC+ supply and Trump’s tariff barrage. "We no longer forecast a price range," Goldman said, "because price volatility is likely to stay elevated on higher recession risk."
Standard Chartered joined the chorus of bearish revisions, slashing its 2025 Brent forecast by $16 to $61 a barrel, and trimming its 2026 outlook to $78. The bank warned that the Trump administration’s tariff-heavy approach is fuelling recession fears and eroding market confidence—especially after a downbeat U.S. economic report this week.
JPMorgan also raised its global recession odds to 60% for the year, while S&P Global warned that oil demand growth could drop by as much as 500,000 bpd.
On Sunday, Barclays lowered its Brent oil price forecast by $4 per barrel to $66 per barrel for 2025 and by $2 to $60 per barrel for 2026, citing the decision by OPEC+ to accelerate oil production hikes.
For fuel card users, prices will fall by up to 1.0 – 1.3 pence per litre for next week.
