WTI recovers to near $65.50 as investors digest OPEC+ large Oil output increase

• The Oil price claws back its initial losses despite OPEC+ announcing bigger-than-expected Oil output increase.
• The US is expected to close trade deals with a number of nations soon.
• US President prepares to send letters to nations that have not signed trade deal, outlining tariff rates.

West Texas Intermediate (WTI), futures on NYMEX, recovers its initial losses and rebounds to near $65.50 during the European trading session on Monday. The Oil price bounces back even as OPEC+ confirms a bigger-than-projected increase in the Oil output from August.

The Oil cartel agreed over the weekend to hike their collective crude production by 548,000 barrels per day (bpd), as they continue to unwind a set of voluntary supply cuts, Bloomberg reported. Economists expected the OPEC+ to raise global Oil production by 411,000 bps, which is announced previously for May, June, and July that was already three times faster than scheduled.

Higher Oil production bodes poorly for the Oil price. Another reason behind the Oil's recovery move is optimism that the United States (US) will close trade deals with a number of its trading partners soon.

US Treasury Secretary Scott Bessent expressed confidence in an interview with CNN over the weekend that Washington will announce several deals in a couple of days. "There's a lot of foot dragging on the other side, and so I would expect to see several big announcements over the next couple of days," Bessent said.

On July 2, Washington stated that it is close to striking a trade agreement with India within 48 hours. However, it has not announced any deal yet.

The closure of fewer trade deals by the US would have a negative impact on the Oil demand, assuming that the imposition of reciprocal tariffs by Washington on higher number of its trading partners will disrupt the global trade.

Additionally, US President Donald Trump has also confirmed that he will start sending letters to nations from Monday, specifying tariffs rates, which have failed to close deal with Washington during the 90-day tariff pause period.