DTN Oil Update

Maria Eugenia Garcia
DTN Energy Editor

HOUSTON (DTN) -- Oil futures settled lower on Tuesday amid abundant supply expectations and weak global demand fundamentals, following OPEC+ announcement over the weekend that it will increase output in September, in addition to the hike already planned for August.

The front-month NYMEX WTI futures contract dropped by $1.13 to $65.16 bbl, while the October ICE Brent futures contract decreased by $1.11 to $67.95 bbl. The September RBOB futures contract fell by $0.0117 to $2.0905 gallon, while the ULSD futures contract for September delivery declined by $0.0671 to $2.2505 gallon.

In contrast, the U.S. dollar rose by 0.024 points to 98.610 against a basket of foreign currencies.

Eight OPEC+ countries agreed to increase output by 547,000 bpd for September during a virtual meeting last weekend. This increase is in addition to the 548,000 bpd rise for August and 411,000 bpd output increase set in July. OPEC+ also raised output by a combined 349,000 bpd in June as well.

These actions have offset the previously tight global supply scenario following the European Union's announcement in July that it will prohibit the import of seaborne crude oil and refined petroleum products from Russia and imposed it a price cap of $47.60 bbl.

The EU expects this to impact around half of Russia's total oil exports to the bloc.

Separately, in July, the Trump administration granted a 50-day grace period for Russia to reach a peace deal with Ukraine by next week. However, as the Kremlin has shown no interest in a ceasefire, experts anticipate additional sanctions on Russian oil flows from the U.S.

Some analysts believe that increasing supplies from OPEC+ countries, coupled with weak demand driven by the ongoing tariff war, are likely to keep crude oil benchmarks below the $70 bbl mark in the short-term.