Oil falls as OPEC+ considers increasing production

Oil prices extended losses during Asian trading and were headed for weekly declines due to renewed concerns over oversupply following a report that OPEC+ may be considering another production hike.

As of 01:36 GMT, July Brent futures were down 0.5% to $64.11 per barrel, while West Texas Intermediate (WTI) futures also fell 0.5% to $60.92 per barrel.

Both contracts were on track for nearly a 2% drop for the week.

The Organization of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, are considering another production increase at their upcoming meeting on June 1, according to a Bloomberg News report on Thursday.

Citing unnamed delegates, the report stated that one option under consideration is a supply increase of 411,000 barrels per day in July, though no final decision has been made.

"This would solidify the group’s policy shift from defending prices to defending market share," analysts at ING noted.

OPEC+ has been gradually phasing out production cuts, with additions to supply already scheduled for May and June.

The upcoming OPEC+ meeting will be critical for the oil market, as the group’s production decision could significantly impact global supply and pricing.

Oil prices were already under pressure after the U.S. Energy Information Administration (EIA) reported an unexpected increase of 1.3 million barrels in crude inventories for the week ending May 16, heightening oversupply concerns.

Earlier this week, the American Petroleum Institute (API) also reported an unexpected increase of 2.5 million barrels in U.S. crude inventories.