(RTTNews) – Oil prices were moving lower on Monday amid fears the market will be overwhelmed by a large oil surplus next year.
As traffic through the Strait of Hormuz heads toward normalization, investment bank Goldman Sachs expects the global oil surplus to be about 3 million barrels per day next year.
Brent crude futures for September delivery were down 0.7 percent at $71.63 a barrel, while WTI crude futures for August delivery fell half a percent to $68.36.
Brent crude futures hovered at their lowest levels since late February as flows persisted via the Strait of Hormuz and OPEC+ agreed to raise its collective oil production target.
Oil supplies are recovering faster than expected, sending increased amounts of oil to the global markets.
A slew of other factors such as China’s sudden drop in imports and potential Iranian export increases also contributed to oversupply concerns and suppressed prices.
The Organization of the Petroleum Exporting Countries and their allies including Russia agreed on Sunday to further raise output by 188,000 barrels per day from August, on top of similar increases for June and July.
The decision reflets the oil cartel’s confidence in boosting production as conditions across the Middle East continue to stabilize.
Major Persian Gulf producers have also been increasing supply, with the United Arab Amirates, which left OPEC during the conflict, leading the recovery.
UAE exports reached a record 3.7 million to 3.8 million bpd in June, more than 1 million bpd above May levels.
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