Oil prices fell on Monday as an easing of geopolitical risks in the Middle East and the prospect of another OPEC+ output hike in August improved supply expectations amid persistent uncertainty over the outlook for global demand.
Brent crude futures fell 13 cents, or 0.19%, to $67.64 a barrel by 0344 GMT, ahead of the August contract's expiry later on Monday. The more active September contract was at $66.62, down 18 cents.
U.S. West Texas Intermediate crude dropped 32 cents, or 0.49%, to $65.2 a barrel.
Last week, both benchmarks posted their biggest weekly decline since March 2023, but they are set to finish higher in June with a second consecutive monthly gain of more than 5%.
A 12-day war that started with Israel targeting Iran's nuclear facilities on 13 June pushed up Brent prices, which surged above $80 a barrel after the U.S. bombed Iran's nuclear facilities and then slumped to $67 after President Donald Trump announced an Iran-Israel ceasefire.
The market has stripped out most of the geopolitical risk premium built into the price following the Iran-Israel ceasefire, IG markets analyst Tony Sycamore said in a note.
Further weighing on the market, four delegates from OPEC+, which includes allies of the Organization of the Petroleum Exporting Countries, said the group was set to boost production by 411,000 barrels per day in August, following similar-sized output increases for May, June and July.
OPEC+ is set to meet on 6 July and this would be the fifth monthly increase since the group started unwinding production cuts in April.
However, bearish pressure from concerns over slower global oil demand, particularly from China, is likely to persist.
Uncertainty around global growth continues to cap prices, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
China's factory activity contracted for a third straight month in June, as weak domestic demand and faltering exports weighed on manufacturers amid U.S. trade uncertainty.
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Oil prices rose by about 2 percent on Wednesday after U.S. crude stockpiles fell far more than expected, while investors awaited the outcome of efforts to end the conflict in Ukraine, with sanctions on Russian oil still in place.
Oil prices rose on Wednesday amid renewed supply concerns following U.S. President Donald Trump’s threat to impose tariffs on India for continuing to purchase oil from Russia.
Oil prices plunged more than 12% last week, ending a three-week rally, with experts expecting them to stabilize around $60 if the fragile ceasefire between Israel and Iran holds.
Oil prices fell sharply for a second day after Israel confirmed a U.S.-brokered ceasefire with Iran, easing fears that the conflict would disrupt global energy supplies.
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