OPEC+ has announced another acceleration in its plan to unwind production cuts, raising June’s output target by 411,000 barrels per day. This marks the second consecutive month of increases, as the group appears determined to maintain its course despite falling oil prices and concerns over weaker demand.
Analysts say global oil inventories are still low enough for OPEC+ to continue easing cuts without immediately creating a supply surplus. However, Saudi Arabia seems to be pushing back against member nations that have repeatedly broken quotas, including Kazakhstan and Iran.
Kazakhstan’s crude output reached 1.852 million barrels per day in March—384,000 barrels per day above its agreed quota. The country also failed to cut back 38,000 barrels per day to compensate for earlier overproduction, bringing its total excess output to 422,000 barrels per day. This trend is expected to continue in the coming months, setting Kazakhstan apart from eight other OPEC+ nations that collectively reduced output by 612,000 barrels per day year-over-year.
At the same time, the oil futures market is showing signs of imbalance. A rare “smile-shaped” curve has emerged, with Brent July futures trading at a premium of 74 cents over October—known as backwardation, which suggests tight supply in the near term. However, from November onward, prices flip into contango, with later contracts priced higher, signaling expected oversupply. Morgan Stanley noted this pattern last appeared briefly before the 2020 oil price collapse.
The shift may reflect market fears that newly imposed tariffs by former President Donald Trump could further hurt global oil demand. Trump recently announced a limited trade deal with the UK, pushing oil prices up on Thursday. Brent crude rose 2.7% to $62.75 per barrel, while WTI gained 3% to reach $59.86.
Despite the price jump, analysts warn the deal falls short of the comprehensive agreement Trump previously promised. UK Prime Minister Keir Starmer has agreed to reduce some non-tariff barriers and speed up U.S. goods into the UK market.
Meanwhile, U.S. jobless claims dropped by 13,000 to 228,000 last week, but continued claims stayed above 1.9 million, highlighting persistent challenges for workers in a slowing economy.
Oil demand is expected to rise during the peak summer driving season. The International Energy Agency (IEA) forecasts demand will increase by 1.3 million barrels per day in the third quarter, up from 104.51 million barrels per day in the second quarter. OPEC+’s planned output hikes—1 million barrels per day so far and another 400,000 in July—nearly match this expected rise, suggesting that a surplus may not appear until later in the year.
Despite near-term support from seasonal demand and refinery activity, analysts at Standard Chartered predict that oil prices will face downward pressure before recovering gradually. The firm recently lowered its 2025 oil price forecast to $61 per barrel from $76, and its 2026 estimate to $78 from $85, citing the impact of Trump’s trade policies.
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