Oil prices rebounded sharply on Monday following OPEC+’s decision to maintain its measured production increase for July, easing investor concerns about a larger-than-expected output expansion.
Brent crude oil, against which Nigerian oil is priced, rose by $1.46 or 2.33% to $64.24 a barrel as of 07:26 a.m. in Nigeria while U.S. West Texas Intermediate (WTI) climbed $1.66 or 2.73% to $62.45 per barrel.
The rally comes after the Organization of the Petroleum Exporting Countries and its allies (OPEC+) confirmed a 411,000 barrels per day (bpd) output increase for July, consistent with hikes announced in May and June.
Markets had priced in the move, but the absence of a surprise larger increase provided short-term price support.
Analysts warned that a more aggressive supply move could have triggered a negative market reaction.
“Had they gone through with a surprise larger amount, then Monday’s price open would have been pretty ugly indeed,” said Harry Tchilinguirian of Onyx Capital Group.
The restrained output hike reflects OPEC+’s continued effort to balance supply recovery with market stability. The group is also sending a clear signal to member countries that have consistently exceeded production quotas.
“The headline motive has centred on punishing OPEC+ members like Iraq and Kazakhstan that have persistently produced above their pledged quotas,” analysts at Commonwealth Bank of Australia noted in a market commentary.
Kazakhstan, in particular, has indicated it does not intend to reduce its oil production, according to comments made by the country’s deputy energy minister last week, as reported by Interfax.
Oil traders had been closely watching the outcome of the OPEC+ meeting amid broader concerns over near-term demand, slowing global growth indicators, and seasonal trends.
Goldman Sachs analysts reiterated their bullish outlook on crude, citing tight spot fundamentals, strong global activity data, and increased demand tied to the U.S. summer driving season.
In a research note dated Sunday, Goldman Sachs projected a final 410,000 bpd OPEC+ increase in August, with the group expected to confirm the decision during its next meeting on July 6.
Domestically, U.S. oil supply data continues to provide bullish signals. Implied gasoline demand in the United States surged by nearly 1 million bpd in recent weeks, marking the third-highest weekly gain in the last three years, according to ANZ analysts.
This rise aligns with the start of the U.S. driving season and supports upward price momentum.
Supply-side pressures remain, particularly with low U.S. fuel inventories and the forecast of an above-average Atlantic hurricane season, which could disrupt production and refining activity.
Meanwhile, U.S. crude output appears to be slowing. Baker Hughes reported a fifth consecutive weekly decline in operating oil rigs, down four to 461 — the lowest level since November 2021.
The current market environment continues to be shaped by disciplined OPEC+ policy, resilient global demand, and tightening inventory levels. While downside risks remain from geopolitical uncertainty and macroeconomic headwinds, traders are responding to the predictability and cohesion displayed by OPEC+.
With the next production decision slated for early July and demand patterns shifting into the peak consumption window, oil markets will remain highly sensitive to policy signals, inventory data and geopolitical developments in the coming weeks.
