Wall Street analysts predict a significant drop in oil prices by the end of the year as increased supply is expected to flood the market.
However, as of Monday, West Texas Intermediate crude (CL=F) was trading above $67 per barrel, and Brent crude (BZ=F), the international benchmark, was above $69 per barrel. The session rise occurred despite the Organization of the Petroleum Exporting Countries (OPEC) and its allies announcing output increases over the weekend.
“All in all, the supply picture definitely looks to be elevating; however, the stronger demand is remaining above expectations as well, hence the choppy trade,” said Dennis Kissler, senior vice president at BOK Financial, in a note on Monday.
OPEC cited lower global oil inventories as a reason to boost output in August by 548,000 barrels per day. This marks the cartel's fourth consecutive monthly increase and was larger than anticipated.
“Saturday's announcement to accelerate supply hikes suggests that the strategic shift to normalizing spare capacity and market share, supporting internal cohesion, and disciplining US shale supply is continuing,” Goldman Sachs analysts Daan Struyven and his team noted on Sunday.
Struyven and his team anticipate OPEC will increase production yet again in September, and maintained their price forecast with Brent averaging $59 in the fourth quarter of 2025 and $56 in 2026.
