Why the next move in oil prices may be down

Benchmark Brent crude prices have risen by 128% from their April low, remaining above $40 a barrel since the middle of June. But rising supply and faltering demand bode ill for those who want oil prices to keep climbing.

The OPEC+ group of oil producers, who have implemented unprecedented output cuts since May, will soon begin to relax their restraint, adding more crude to a market that is also seeing the first signs of recovery in North American production.

The group of 23 oil producing countries, led by Saudi Arabia and Russia, confirmed they would reduce the size of their output cuts to 7.7 million barrels a day from the start of August, which would add almost 2 million barrels to daily production levels. Some of that increase should be offset by deeper reductions from members who failed to cut what they promised in May and June, as long as they deliver on their promises this time.