Oil prices surged nearly 3% on Monday after the OPEC+ alliance reaffirmed its commitment to a planned production hike of 411,000 barrels per day in July, mirroring the increases made in May and June. The decision eased market concerns about the possibility of a larger-than-expected output boost, lifting Brent crude to $64.65 a barrel and U.S. West Texas Intermediate to $62.82, recovering from last week’s modest declines.
The move came after days of speculation that the group might pursue a more aggressive ramp-up. However, internal disagreements—particularly objections from members like Russia—kept the increase steady. Traders, who had already priced in the 411,000 bpd figure, unwound short positions, fueling the rally. According to analysts, bearish bets in Brent had reached their highest levels of the year leading up to the announcement, positioning the market for a sharp upside move once the worst-case scenario failed to materialize.
Beyond OPEC+, broader supply-side risks added to the bullish momentum. Tensions escalated as Ukraine targeted Russian air bases, while Iran came under renewed scrutiny over its uranium enrichment activities. Wildfires in key Canadian production zones further raised alarms about potential disruptions. Combined, these developments deepened uncertainty about future supply flows from politically sensitive regions.
Meanwhile, fundamentals remained tight. U.S. gasoline demand saw a dramatic spike—nearly 1 million barrels per day—marking one of the largest weekly gains in years, according to ANZ. This comes as domestic inventories remain low and forecasters predict an unusually active hurricane season, potentially threatening Gulf Coast output in the coming months.