Oil Market Resilience Amid OPEC+ Production Hike and Tariff Concerns
Oil markets rebounded despite OPEC+'s decision to increase production by more than expected in August, amid worries over U.S. tariffs. Analysts note that the market remains tight, suggesting it can absorb additional supply. Saudi Arabia raised prices for Arab Light crude, reflecting confidence in demand.
Oil prices showed resilience on Monday despite an agreement by OPEC+ to increase output more significantly than anticipated in August. Concerns over potential U.S. tariffs initially rattled the market, yet prices reversed early losses due to the tight physical market lending support.
The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, decided to raise production by 548,000 barrels per day next month. This increase exceeds the previous monthly hikes of 411,000 barrels per day from earlier in the year. Brent crude futures rose by 36 cents to $68.66 a barrel by 1145 GMT, while U.S. West Texas Intermediate crude demonstrated similar recovery patterns despite earlier dips.
Saudi Arabia, indicating confidence in global oil demand, increased the price of its Arab Light crude to a four-month high for Asian markets. Although investors remain concerned about the implications of U.S. tariffs on economic activity, the market's tightness suggests an absorption capacity for the additional barrels. Analysts predict further production adjustments in the coming months.
(With inputs from agencies.)
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