Oil Drops for Second Day as Traders Brace for Another OPEC+ Hike

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(Bloomberg) -- Oil fell for a second day in the lead up to an OPEC+ meeting that’s expected to deliver another substantial production hike, while President Donald Trump’s latest tariff threats dented wider risk appetite.

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West Texas Intermediate slid below $67 a barrel, extending its 0.7% drop on Thursday. The cartel is considering speeding up its oil production revival even further, and will discuss a hike of more than 411,000 barrels a day for August at a meeting on Saturday, delegates said.

Global trade policy has also been in focus, pushing equities in Asia and elsewhere lower. Trump said his administration will begin sending out letters to trading partners to set unilateral tariff rates ahead of a July 9 deadline, and that the new levies will come into force in August.

Crude has been volatile in recent weeks, roiled by fears that the Israel-Iran war would hamper supply. While markets have since calmed, apprehension lingers over negotiations with Iran, the US-led trade talks and evolving policy by OPEC+.

“The absolute fundamentals of the market are taking over,” said Susan Bell, senior vice president of downstream research at Rystad Energy in Calgary. “The risk premiums have gone out of the market, and the fundamentals are quite weak.”

On Iran, Washington plans to restart nuclear talks, and US Middle East envoy Steven Witkoff is set to meet Foreign Minister Abbas Araghchi in Oslo next week, Axios reported. Meanwhile, the US took fresh steps to restrict the trade of the Islamic Republic’s oil, keeping up pressure on Tehran.

In Canada, a wildfire emerged in the Fort McMurray area, about 20 kilometers (12 miles) from a major oil-sands production site. Production from Alberta fell to the lowest in two years in May, combining with falling output from Mexico and a ban on Venezuelan flows to strengthen heavy crude prices.

--With assistance from Yongchang Chin, Rob Verdonck and Nicholas Lua.