Oil prices fell significantly on May 05 (Monday) after OPEC+ announced plans to boost oil production by 411,000 barrels per day (bpd) in June, compared to May levels, as part of a plan to gradually unwind voluntary output cuts, the group said Saturday following a virtual meeting. The decision to increase output sparked concerns over a potential oversupply, further exacerbating fears of fragile global demand.

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International benchmark Brent crude futures were trading at $59.14 per barrel as of 04.09 GMT, a 3.51 per cent decline on the previous close, while the US benchmark West Texas Intermediate (WTI)  dipped by 3.76 per cent to $56.1 per barrel. However, key benchmarks later recovered some ground with Brent futures trading at $60.17 per barrel, down 1.83 per cent as of 07.27 GMT, and WTI futures declining by 1.85 per cent to $57.21 per barrel, down from $58.10 at the close of the prior session.

OPEC’s oil supply

The OPEC+ group announced that eight of its members—Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman—would increase oil output starting June. This marks the second consecutive month of production hikes, following a decision to unwind voluntary production cuts that had been in place for months.

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The move is seen as a response to supply concerns, as the global oil market has experienced significant volatility in recent months, with prices falling nearly 30 per cent over the past year and about 20 per cent in 2025. Despite this, OPEC+ pointed to strong fundamentals as the reason behind the decision, although analysts have speculated that the increase could also be aimed at improving relations with the US, particularly ahead of President Donald Trump's scheduled visit to the West Asia later this month.

Oil and paint companies profit

The development led to 2 per cent to 3 per cent rally in the shares of oil marketing companies, paint manufacturers, and tyre companies. Following the plunge in crude, shares of Bharat Petroleum traded at ₹323 a piece, up by 4.1 per cent, Hindustan Petroleum up 5.6 per cent and Indian Oil Corporation up 3.9 per cent.

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Apart from these shares of paint companies like Asian Paints, Berger Paints, Indigo Paints, and Kansai Nerolac also traded 1 per cent to 2 per cent higher in the morning session.

(With inputs from agencies)