Oil prices hit by 'bombshell' Opec+ output hike

Oil buckled on concerns of a global glut after Opec+ agreed to another bumper output increase, adding to supply at a time when demand is challenged by the drag from the trade war.

- YONGCHANG CHIN

Global benchmark Brent tumbled as much as 4.6% toward $58 a barrel as the week's trading kicked off, while West Texas Intermediate was near $56. The decision by Opec and its allies was taken at a meeting on Saturday, with the group's leaders seeking to punish overproducing members, including Kazakhstan, in a strategy shift that had already sent prices plunging.

The latest hike of more than 400,000 barrels a day from June matched a similar increase announced last month, when the group made the shock decision to bring back triple the planned volume for May. The alliance — led by Saudi Arabia and Russia — has been reversing prolonged output curbs that were meant to support prices, but which cost it market share to rival drillers.

After the meeting, Saudi Arabia signalled further similar-sized increases could follow, according to delegates.