Oil Near Recent Lows as OPEC+ Raises Output

Key Takeaways

• Brent crude traded near $72 per barrel, close to its lowest level since late February.
• Seven OPEC+ countries agreed to raise collective production targets by 188,000 barrels per day from August.
• Cumulative quota increases since April have reached almost 800,000 barrels per day.
• Recovering Gulf exports and higher OPEC production have increased expectations of greater physical supply.
• Traders are watching $71.70 support and $72.60 resistance for Brent’s next short-term move.

Brent crude remained under pressure near $72 per barrel after OPEC+ approved another production-target increase and exports from Persian Gulf producers continued to recover.

Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman agreed to increase their collective targets by 188,000 barrels per day from August. This marked the fifth consecutive monthly increase, bringing cumulative quota additions since April to almost 800,000 barrels per day.

The decision shifted market attention away from immediate supply-disruption risks and towards whether global demand can absorb the additional crude entering the market. However, actual supply may rise more slowly than official quotas suggest, as several producers remain below their production targets.

Why Traders Are Watching This

Traders are focused on whether higher OPEC+ quotas and improving shipping conditions translate into a meaningful increase in physical supply.

OPEC production recovered by around 3.3 million barrels per day in June to 19.43 million barrels per day, while Gulf exports climbed above 10 million barrels per day. However, exports remained around 40% below pre-war levels.

Additional influences include:

• Shipping activity through the Strait of Hormuz
• Actual OPEC+ production and export volumes
• Chinese crude import demand
• US inventories and Russian exports
• The next OPEC+ meeting on 2 August

China’s seaborne crude imports also fell to their lowest level in more than a decade in June, increasing concerns that demand may struggle to absorb additional supply.

Continued export recovery could strengthen the oversupply outlook, while renewed geopolitical disruption or stronger demand may support a Brent rebound.

Technical Analysis & Key Levels

UKOUSD is trading near $71.90, between immediate support at $71.70 and resistance at $72.60. Wider resistance levels sit at $75.00, $77.50 and $80.00, while additional support is located at $70.00 and $67.50.

A sustained move above $72.60 could ease immediate selling pressure and bring $75.00 into focus. However, the broader bearish structure may remain intact unless the price breaks and holds above $75.00.

A decline below $71.70 could expose the psychological $70.00 level. If selling continues below this area, the next wider downside reference is near $67.50.

Trading Outlook

Short-term sentiment remains cautiously bearish as higher OPEC+ quotas, recovering Gulf exports and weak Chinese demand reinforce supply concerns.

A move above $72.60 could support a short-term recovery towards $75.00, while a break below $71.70 may extend the decline towards $70.00. A deeper move below $70.00 could bring $67.50 into focus.

Brent may remain under pressure unless global demand improves, geopolitical risks return or OPEC+ producers fail to deliver the expected rise in physical supply. Traders should continue monitoring actual production, Gulf shipping activity, Chinese imports and US inventories for signs of the next directional move.

For a detailed look at how OPEC+ production policy, Gulf exports and global demand are shaping Brent’s outlook, explore the full analysis in this article.