As a new trading week gets underway, WTI crude oil prices are sliding lower as markets focus on possible oversupply after OPEC and allies start increasing oil production since the beginning of this month. At the time of writing, WTI crude oil is trading at around $40.02 per barrel.

After having cut production over the past few months to balance the fall in demand as a result of the coronavirus pandemic and the resulting lockdowns around the world, OPEC+ is set to increase their output by 1.5 million bpd even as the demand for oil globally is yet to pick up significantly. In addition, crude oil prices continue to trade under pressure over worries of a second wave of the pandemic which could force governments to reimpose lockdowns again.

According to a recent Reuters poll, oil prices could move higher towards the end of this year as countries gradually ease lockdown restrictions and resume normal levels of operation. However, any possible resurgence in cases could curtail hopes of recovery in prices.

Traders also worry about US shale oil producers increasing production when oil prices rise in the near future, as this could drive further supply glut in the global oil market.