Are crude oil prices headed for a slump as OPEC+ boosts output faster?

Dubai: Crude oil prices could fall below $60 a barrel in the coming months as a fresh wave of supply from OPEC+ meets weakening global demand, top investment banks have warned.

On Saturday, OPEC+ agreed to raise production by 548,000 barrels per day in August—the third monthly hike in a row and part of a plan to fully reverse its voluntary supply cuts by September, a full year ahead of schedule. The move reflects confidence in near-term consumption but risks flooding the market by year-end.

Analysts at JPMorgan Chase and Goldman Sachs now anticipate a build-up in crude inventories, projecting that benchmark oil prices could sink toward $60 a barrel in the fourth quarter unless demand significantly rebounds.

The bearish outlook comes as West Texas Intermediate (WTI) crude struggles to gain ground, holding near $65 a barrel amid sluggish economic activity in China and the Eurozone. Despite a seasonal boost in refining margins and summer fuel demand, traders see signs of softness building across global markets.

Brent crude spiked briefly above $80 last month during an escalation between Israel and Iran, but prices quickly retreated after a U.S.-brokered ceasefire and a pledge from Iran to re-commit to the Nuclear Non-Proliferation Treaty—easing fears of immediate supply disruption.

Adding to the cautious sentiment, Saudi Arabia’s state oil giant Aramco raised prices for its Arab Light crude sold to Asia by $1 a barrel for August—far more than expected. While the hike suggests confidence in regional demand, it also tests the resilience of buyers amid growing global supply.

With 2.2 million barrels per day set to return to the market through September, the oil landscape may soon shift from tightness to oversupply. If economic data continues to show lackluster manufacturing and trade, especially in key consuming nations, analysts warn that prices could dip to multi-month lows by the end of Q3.

In the short term, prices may remain rangebound. But with supply rising and uncertainty surrounding future demand, the risk of a broader slide appears to be growing.