Oil falls to two-week low on OPEC+ supply fears and rising inventories

Brent crude futures fell below $64 per barrel on Thursday, reaching their lowest levels in two weeks, as traders reacted to growing signs that OPEC+ may move ahead with another sizeable production increase.

Oil falls to two-week low on OPEC+ supply fears and rising inventories

Among the options reportedly under discussion is a 411,000 barrels-per-day output hike for July, although no final agreement has yet been reached. WTI crude also slipped, nearing $60 per barrel amid mounting bearish sentiment in the energy markets. Adding to the pressure were renewed concerns over global oversupply after the U.S. Energy Information Administration (EIA) reported a surprise build in domestic crude inventories last week. Stockpiles of gasoline and distillates also rose, further fueling worries about weakening demand in the world's largest oil consumer. These developments offset earlier optimism about tightening supply dynamics and reinforced a more cautious outlook for prices in the near term. Sentiment was further weighed down by a broad risk-off move across financial markets, driven in part by deepening anxiety over the ballooning U.S. fiscal deficit and its implications for inflation, interest rates, and overall economic stability. The dollar weakened slightly, but not enough to meaningfully support oil prices.

Geopolitical developments add another layer of complexity

Investors are closely watching the upcoming fifth round of nuclear talks between the U.S. and Iran, set for this weekend. While the talks aim to revive the 2015 nuclear deal and could pave the way for the return of Iranian oil to global markets, recent media reports of potential Israeli strikes on Iranian nuclear facilities injected fresh uncertainty into the outlook. For now, however, diplomatic progress appears to have helped temper fears of major supply disruptions in the Middle East. Overall, the oil market remains delicately balanced, with traders weighing the potential for increased OPEC+ supply and recovering Iranian exports against signs of softening demand and swelling inventories. Volatility is likely to remain elevated in the short term as negotiations, data releases, and policy signals continue to shape the evolving energy landscape.