Oil prices edge lower as OPEC+ raises output targets, Gulf exports recover

Oil prices edged lower on July 6 after OPEC+ agreed to increase production targets from August and exports from key producers through the Strait of Hormuz continued to recover, raising expectations of increased global supply.

Brent crude futures fell 34 cents, or 0.47%, to $71.78 a barrel by 04:08 GMT after gaining 0.45% in the previous session. U.S. West Texas Intermediate (WTI) crude slipped 20 cents, or 0.29%, to $68.49 a barrel. There was no WTI settlement on July 3 because U.S. markets were closed ahead of the Independence Day holiday, Caliber.Az reports per foreign media.

Oil prices were little changed last week after several weeks of declines, as investors monitored developments in U.S.-Iran relations and the recovery of oil exports through the Strait of Hormuz following recent regional tensions.

"Coming off the U.S. long weekend, traders are sitting tight and waiting to see whether U.S.-Iran relations will be cordial or volatile this week," said Tim Waterer, chief market analyst at KCM Trade.

The Organisation of the Petroleum Exporting Countries and its allies, collectively known as OPEC+, agreed on July 5 to raise production targets by 188,000 barrels per day from August, following similar increases introduced for June and July.

Despite the higher production targets, the increase has yet to be fully reflected in actual output because the recent U.S.-Israeli war with Iran disrupted tanker traffic through the Strait of Hormuz, limiting exports from major producers including Saudi Arabia, Kuwait and Iraq.

"The number was largely in line with expectation," IG market analyst Tony Sycamore said.

By Sabina Mammadli