CVX,SHEL,BP: Oil Prices Slip on Fears of Extra OPEC+ Supply and U.S. Debt

Oil prices took a dive today on concerns that a boost in production from the OPEC+cartel and fears over U.S. debt will play havoc with supply and demand.

July Hike

Both West Texas Intermediate crude oil price, which is the U.S. standard, and Brent crude oil prices, the international benchmark, were down over 1% in early trading.

Major oil stocks also looked less slick with Chevron (CVX) down 0.2%, Shell (SHEL) off 0.5% and BP (BP) leaking 0.4%.

The oil dip came on reports that members of OPEC+ were discussing making a third consecutive increase in output, with a decision set to be made at the group’s meeting on 1 June.

One of the options believed to be in the frame is an output hike of 411,000 barrels a day for July, which would be triple the amount initially planned.

This extra gush of supply onto the market could be met by a drop in demand. This is due to ongoing geopolitical concerns, particularly in the Middle East, and the large tax-cut and spending bill from the Trump administration going through U.S. Congress.

Debt Pile

“Oil prices have dropped back as concerns about the US debt pile added another layer of wariness about the outlook for the global economy and energy demand,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown in the U.K.

The Brent crude price is down nearly 12% so far this year and is expected to remain subdued.

“OPEC has changed course this year, from being a key driver of higher oil prices, to being a big dampener. As it boosts supply, we do not see Brent accelerating much above $65 in the medium term,” said Kathleen Brooks, research director at XTB.

What are the Best Oil Stocks to Buy Now?

We have rounded up the best oil stocks to buy using our TipRanks comparison tool.