Oil prices fell in early Monday trading in Asia after OPEC+ confirmed another production increase for September, fueling fears of oversupply amid signs of weakening U.S. demand and rising global trade tensions.
The decline followed Friday’s losses, triggered by underwhelming U.S. jobs data that highlighted potential softness in the world’s largest oil market. At the same time, fresh trade tariffs announced by President Donald Trump added to market unease, with at least 70 countries expected to be affected by the new levies.
By 01:40 GMT, Brent crude futures for September delivery had fallen 0.5% to $69.35 per barrel, while U.S. West Texas Intermediate (WTI) crude dipped 0.3% to $65.90 per barrel.
Still, both benchmarks had ended the previous week with modest gains, supported by geopolitical risks as Washington floated the idea of tighter sanctions on Russian crude exports.
OPEC+ Moves Forward With September Output Bump
On Sunday, OPEC and its allies agreed to raise collective oil output by 547,000 barrels per day in September—matching the increase for August and marking the sixth consecutive monthly hike. This gradual ramp-up reflects the alliance’s continued rollback of the supply cuts introduced during the pandemic-era demand collapse.
July’s increase of 411,000 barrels per day also signals the group’s steady return to pre-cut production levels, though the market remains concerned that additional supply could outpace demand in the near term.
Investors reacted cautiously to the news, worried that the new volumes may reduce the impact of U.S. sanctions targeting Russian oil exports, thus keeping global inventories well-supplied.
Soft U.S. Data Heightens Demand Worries
The market was further pressured by signs of economic cooling in the United States. Friday’s nonfarm payroll report revealed job growth of just 73,000 in July—far below forecasts—and included significant downward revisions to prior months. That data added to fears of softer fuel consumption heading into the final months of the year.
Ongoing concerns over Trump’s aggressive tariff agenda also weighed on sentiment. With many of the new trade measures set to take effect imminently, businesses and investors are bracing for potential disruptions in global commerce and industrial activity—both of which are major drivers of energy demand.
Additionally, weaker purchasing manager index (PMI) readings have pointed to slowing momentum in U.S. business activity, a trend that could further drag on oil consumption.
Nonetheless, geopolitical developments provided some limited upside last week. Trump threatened retaliatory tariffs on major buyers of Russian oil, including China and India, and hinted at more forceful action against Moscow over its role in the Ukraine conflict.
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