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Benchmarks poised for repeat monthly gains

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oil supply risk premium shrinking, says analyst

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OPEC+ plans could smother any upside in prices, says

analyst

(Updates at 1:10 p.m. EDT)

By Georgina McCartney

HOUSTON, June 30 (Reuters) - Oil prices fell on Monday

as investors weighed easing Middle East risks and a possible

OPEC+ output increase in August.

Brent crude futures were down 13 cents, or 0.2%, to

$67.64 a barrel at 1:10 p.m. EDT (1710 GMT), ahead of the August

contract's expiry later on Monday. The more active September

contract was down 14 cents at $66.66.

U.S. West Texas Intermediate crude was down 51 cents,

or 0.8%, at $65.01 a barrel.

The Brent and WTI benchmarks posted their biggest weekly

declines since March 2023 last week but are set for a second

consecutive monthly gain of 5.9% and 6.9% respectively.

A 12-day war that started with Israel targeting Iran's

nuclear facilities on June 13 sent prices above $80 a barrel

before sliding back to $67.

"This ceasefire that was quickly engineered appears to be

holding up, so the supply risk premium that was in place is

continuing to be withdrawn in a rapid fashion," said John

Kilduff, a partner at Again Capital.

Meanwhile, U.S. crude oil production hit a record 13.47

million barrels per day in April, up from 13.45 million bpd in

March, according to data released by the Energy Information

Administration as part of its Petroleum Supply Monthly series.

The record U.S. oil production was adding to the bearish

sentiment on Monday, Kilduff added.

OPEC+ SET TO BOOST PRODUCTION IN AUGUST

Four OPEC+ sources told Reuters last week that the group was

set to boost production by 411,000 bpd in August after similar

increases for May, June and July.

If the increase is agreed, it would bring the total rise in

supply from OPEC+ to 1.78 million bpd so far this year,

equivalent to over 1.5% of total global demand.

"I believe this potential supply pressure remains

under-priced, leaving crude vulnerable to further weakness,"

said Ole Hansen, head of commodity strategy at Saxo Bank.

The oil producer group is set to meet again on July 6.

Some market tightness remains despite rising output,

however, said Giovanni Staunovo, analyst at UBS.

A Reuters survey found that OPEC oil output rose in May, but

gains were limited by cuts by countries that had previously

exceeded their quotas. Saudi Arabia and the United Arab

Emirates, meanwhile, made smaller increases than allowed.

Kazakhstan, which has persistently exceeded quotas set by

OPEC+, may exceed its previous oil production forecast by around

2% this year following an upgrade to output at its largest

Caspian oilfields, Reuters calculations, based on data from

state-owned energy company KazMunayGaz, showed.

A survey of 40 economists and analysts in June forecast

Brent crude will average $67.86 per barrel in 2025, up from

May's $66.98 forecast, while U.S. crude is seen at $64.51, above

last month's $63.35 estimate.