Oil
futures slipped slightly due to US Independence Day holiday on Friday, as the
market looked ahead to this weekend's OPEC Plus meeting and the likelihood that
member countries will decide to raise output. Brent crude futures settled
down at US$68.30 a barrel while US West Texas Intermediate declined US$66.50 at
1700 GMT.
Eight members of the group - Saudi Arabia, Russia, the UAE,
Kuwait, Oman, Iraq, Kazakhstan and Algeria - are scheduled to meet online on
Saturday to decide their oil output policy for August.
OPEC Plus made a radical change in policy this year when the
eight members started to unwind their most recent output cut of 2.2 million bpd
starting in April. They then accelerated the hikes in May, June and July to
411,000 bpd for each month, despite the extra supply weighing on crude prices.
Earlier on Friday, other sources told Reuters the group was
expected to agree to an increase of 411,000 bpd for August, which remains a
possible outcome of Saturday's meeting.
The
total number of active drilling rigs in the US has been on the decline, reaching
its lowest level since late 2021 in June 2025, driven by lower oil prices, a
focus on shareholder returns over production increases, and strategic shifts
within the energy sector. As of early July 2025, the total US rig count
was reported at approximately 539, down from 547 the previous week and 581 a
year ago, with oil rigs seeing the most significant decrease.
The acceleration of the output hikes came after some OPEC
Plus members, such as Kazakhstan, produced way over their targets, angering
other members that were sticking more closely to agreed cuts.
Kazakh output returned to growth last month and matched an
all-time high, as the Chevron-led Tengiz field ramped up.
OPEC Plus, comprising of Organization of the Petroleum
Exporting Countries and allies led by Russia, is looking to expand its market
share against the backdrop of growing supplies from other producers like the
United States.
The group pumps about half of the world's oil. As of their
decision for July output, the OPEC Plus eight have made or announced production
increases of 1.37 million bpd. This is 62% of the production cut of 2.2 million
bpd that they are unwinding.
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