Oil prices drop as OPEC plans to increase output

Oil prices dropped to their lowest level in a week after the OPEC+ group (which includes OPEC and other oil-producing countries) decided to increase oil production again in September.

This raised concerns about having too much oil on the market, especially after recent U.S. data showed weak fuel demand.

Brent crude oil prices fell by 43 cents (0.6%) to $69.24 per barrel, and U.S. West Texas Intermediate crude dropped by 48 cents (0.7%) to $66.85 per barrel. Both prices had already fallen by more than 2% earlier in the day and were down nearly 3% last Friday.

Meanwhile, Nigeria’s oil production reached over 1.8 million barrels per day (bpd) last month, with a current average of 1.78 million bpd. This was announced by Gbenga Komolafe, head of the Nigerian Upstream Petroleum Regulatory Commission.

Since Nigeria relies heavily on oil — for about two-thirds of its government income and over 80% of foreign currency earnings — this increase in production is very important for its economy. The last time Nigeria reached 1.8 million bpd was in November.

Komolafe said the commission will keep working with industry partners to maintain the increase in production and improve transparency.

On Sunday, OPEC+ agreed to raise oil output by 547,000 bpd in September. This move is part of their ongoing plan to bring back the oil production that was previously cut. So far, they’ve reversed about 2.5 million bpd of cuts, which is around 2.4% of global oil demand.

OPEC+ says the decision is based on strong market conditions. However, U.S. data released last week showed the weakest gasoline demand in May (the beginning of the summer driving season) since the COVID-19 pandemic in 2020. U.S. oil production also hit a record high in May, adding more supply to the global market.

Traders are now preparing for the possibility of even more oil from OPEC+, especially with a meeting scheduled for September 7 to discuss removing another 1.65 million bpd in cuts. Alex Hodes, an analyst at StoneX, noted that while OPEC+ hasn’t clearly said it will increase output further, they still have spare capacity and could use it if needed.

Goldman Sachs analysts believe that even though eight OPEC+ countries have increased production since March, the actual rise is around 1.7 million bpd, as some other countries had to cut back after producing too much earlier.

Investors are also watching the effects of new U.S. tariffs. President Donald Trump has warned of strong tariffs on countries buying oil from Russia, trying to pressure Moscow to end the war in Ukraine.

He also said he will raise tariffs on India for continuing to buy Russian oil. India’s ongoing purchases put about 1.7 million bpd of global oil supply at risk, according to analysts from