May 22, 2025 — Oil prices dropped by 1% on Thursday as reports emerged that OPEC+ is considering a production increase for July, raising concerns that global oil supply may soon outpace demand.
According to Bloomberg News, OPEC and its allies (OPEC+) are in discussions to raise production by as much as 411,000 barrels per day (bpd) starting in July. While no final agreement has been reached, the report has already triggered a market response.
By 0800 GMT, Brent crude futures fell by 64 cents, or 1%, to $64.27 per barrel, while U.S. West Texas Intermediate (WTI) crude slipped 59 cents, or 1%, to $60.98 per barrel.
“The market is reacting to signs that OPEC is shifting from price defense to protecting market share,” said Harry Tchiliguirian of Onyx Capital Group. “It’s like pulling off a Band-Aid—sudden and significant.”
The potential production increase aligns with OPEC+’s ongoing strategy to unwind earlier output cuts. The group has already added supply in May and June, and previous reports suggest as much as 2.2 million bpd could be restored by November.
RBC Capital Markets analyst Helima Croft noted that a 411,000 bpd hike—primarily from Saudi Arabia—is the most probable outcome of the upcoming OPEC+ meeting scheduled for June 1.
Meanwhile, U.S. Energy Information Administration (EIA) data released Wednesday added to the bearish sentiment. Contrary to analysts’ expectations of a 1.3 million-barrel draw, U.S. crude inventories increased by 1.3 million barrels last week, reaching 443.2 million barrels.
Crude imports surged to a six-week high, while gasoline and distillate demand weakened, leading to the surprise stock builds.
“These unexpected inventory builds, particularly for WTI, are likely to exert more downward pressure on prices,” said Emril Jamil at LSEG Oil Research. “It could also incentivize more U.S. crude exports to markets in Europe and Asia.”
Adding to the bearish signals, the rise in U.S. 10-year Treasury bond yields suggests weaker demand outlooks. This raises concerns that OPEC+ may be boosting supply into a softening global oil market.
Key Takeaways:
- Oil prices fell 1% amid reports of a potential OPEC+ production increase.
- Brent crude dropped to $64.27, WTI to $60.98 per barrel.
- OPEC+ considering a 411,000 bpd output hike in July.
- U.S. crude inventories unexpectedly rose, pressuring prices.
- Weaker demand signals could challenge the market’s ability to absorb increased supply.