FX.co ★ Oil Drops as OPEC+ Confirms Output Hikes

West Texas Intermediate (WTI) crude oil futures experienced a decline of over 3%, settling at approximately $56.1 per barrel on Monday. This downturn follows the decision by OPEC+ to enhance production levels, which has heightened fears of an oversupplied global market. For the second consecutive month, OPEC+ has committed to increasing oil production, approving an output rise of 411,000 barrels per day for June. This increment may reintegrate up to 2.2 million barrels per day into the global market by November. This strategic move is led by Saudi Arabia, aiming to discipline certain member countries that have surpassed their production limits. Adding to market uncertainty, geopolitical tensions have escalated in the Middle East. This follows Israeli Prime Minister Benjamin Netanyahu's declaration of potential retaliation against Iran after the Tehran-supported Houthi faction launched a missile landing near Israel's principal airport. In a further statement, Iran's Defense Minister, Aziz Nasirzadeh, issued a warning on Sunday, indicating Tehran's readiness to retaliate if faced with aggression from the United States or Israel.