Morning Highlights: Oil Jumps 3% After OPEC+ Sticks to Expected Output Hike

Market Snapshot (as of 6:30 EST)

🔼 Brent (Aug): $64.86/b (+$2.08 | +3.31%)

🔼 WTI (July): $62.98/b (+$2.19 | +3.62%)

Last Week: Both contracts lost over 1%

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Key Themes Today:

• OPEC+ confirms July output hike of 411,000 bpd, in line with May and June

• Markets relieved no surprise increase was announced

• Kazakhstan confirms it will not cut production

• U.S. gasoline demand surges ahead of peak driving season

• Goldman Sachs sticks with $60 Brent forecast, expects slowdown in 2H

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Key Drivers:

🔸 OPEC+ Confirms Output Path

Saturday’s meeting ended with no surprises—OPEC+ will raise output by 411,000 bpd in July, marking the third consecutive monthly hike. The group is continuing to reclaim market share and respond to quota violations by members like Kazakhstan.

Onyx Capital’s Harry Tchilinguirian: “Had they gone through with a surprise larger amount, then Monday’s price open would have been pretty ugly indeed.”

Traders had already priced in the 411,000 bpd increase, but prices rallied Monday on relief no larger hike was announced.

PVM’s John Evans: “Given Kazakhstan’s refusal to curb output, OPEC+ had little choice but to maintain course.”

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🔸 Market Focus Turns to August Decision

Goldman Sachs expects OPEC+ to add another 410,000 bpd in August, with a pause in supply increases likely thereafter.

Goldman Sachs: “Tight spot fundamentals, strong global activity, and seasonal demand suggest continued support through summer.”

Still, the bank reiterated a bearish long-term view, citing rising non-OPEC+ supply and weakening global growth. Their forecast remains:

• 📉 Brent: $60/b in 2025

• 📉 WTI: $56/b in 2025

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🔸 Kazakhstan and Russia Press Supply Higher

Despite the coordinated strategy, Kazakhstan formally told OPEC+ it will not reduce output. This continues to undermine internal discipline, even as Russia, Iraq, and others also signal increasing exports.

Interfax (via Kazakh Deputy Minister): Kazakhstan has no plans to cut output, regardless of group decisions.

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🔸 U.S. Gasoline Demand Surges

With the U.S. entering peak driving season, gasoline implied demand jumped nearly 1 million bpd last week—the third-highest weekly increase in three years, according to ANZ.