Oil prices declined on Monday after the OPEC+ alliance agreed to a substantial production increase for September, even as traders remained cautious amid the threat of additional US sanctions on Russia.

Brent crude futures dropped 85 cents, or 1.2%, to $68.82 a barrel by 08:46 GMT, while US West Texas Intermediate (WTI) crude fell 82 cents, also 1.2%, to $66.51 a barrel. Both benchmarks had closed nearly $2 lower on Friday.

The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, agreed on Sunday to boost oil output by 547,000 barrels per day in September. The move is part of a series of rapid supply increases aimed at reclaiming market share.

This step—largely anticipated by markets—marks a full and early reversal from the bloc’s largest tranche of production cuts, which had totaled around 2.5 million barrels per day, or roughly 2.4% of global demand.

Goldman Sachs analysts estimate that the actual increase in supply from the eight OPEC+ countries that have been ramping up output since March will reach about 1.7 million barrels per day, as other members have cut back after previously exceeding their quotas.

Meanwhile, investors continued to assess the impact of recent US tariffs on exports from dozens of trading partners.

Still, markets remained wary of potential new sanctions on Russia, after President Donald Trump threatened to impose 100% secondary tariffs on buyers of Russian crude oil in a bid to pressure Moscow into halting its war in Ukraine.

“Over the medium term, oil prices will be driven by a mix of tariffs and geopolitical factors. Any price spikes resulting from energy sanctions are likely to be temporary,” said Tamas Varga, an analyst at PVM.

Two trading sources said Friday, citing LSEG trade flow data, that at least two tankers carrying Russian oil bound for Indian refineries had been rerouted following the new US sanctions.

Analysts at ING wrote in a note that roughly 1.7 million barrels per day of crude supply could be at risk if Indian refiners cease purchases of Russian oil.

However, two Indian government sources told Reuters on Saturday that the country would continue buying oil from Russia despite Trump’s threats.

The US dollar found some support on Monday after a disappointing US jobs report on Friday and President Donald Trump’s abrupt dismissal of a top labor statistics official, which had delivered a blow to the currency and fueled investor bets on an imminent Federal Reserve rate cut.

Data released on Friday showed that job growth in the US fell short of expectations in July, with prior non-farm payroll figures for the two previous months revised down by a staggering 258,000 jobs—pointing to a sharp deterioration in labor market conditions.

“Perhaps the report itself wasn’t extremely weak, but the revisions were highly significant,” said Mohamed Elsarraf, FX strategist at Danske Bank. “It’s hard to imagine the Fed not cutting rates in September.”

Adding further pressure to markets, Trump fired Bureau of Labor Statistics (BLS) chief Erica McEnturfar on the same day, accusing her of manipulating employment figures.

The surprise resignation of Fed Governor Adriana Kugler also opened the door for Trump to exert greater influence on the central bank sooner than expected, amid ongoing tensions with the Fed over what he perceives as delays in rate cuts.

These back-to-back developments dealt a double blow to the greenback, which slumped more than 2% against the yen and around 1.5% against the euro on Friday.

On Monday, the dollar clawed back some losses, rising 0.3% to 147.91 yen in latest trading, though still nearly three yen below its Friday peak.

The euro dipped 0.2% to $1.1561, while the British pound was little changed at $1.3276.

Trump said on Sunday that he would announce nominees for both the vacant Fed seat and a new BLS chief in the coming days.

The dollar index, which tracks the greenback against a basket of major peers, rose 0.2% to 98.88 on Monday, after sliding more than 1.3% on Friday.

In July, the dollar posted a 3.4% gain—its biggest monthly rise since a 5% surge in April 2022 and its first monthly increase of 2025—buoyed by growing market confidence in Trump’s trade policy and the resilience of economic data in the face of tariffs.

US Bond Yields Slide as Rate Cut Bets Surge

The 2-year US Treasury yield fell to a three-month low of 3.659% on Monday as traders sharply raised bets on a September rate cut. The benchmark 10-year yield also hovered near a one-month low at 4.2434%.

Markets are now pricing in nearly a 90% probability that the Fed will cut interest rates next month, based on weak labor data, with around 60 basis points of easing priced in by December. That implies two 25-basis-point cuts and a 40% chance of a third.

“The market reaction to Friday night’s events was swift and decisive—stocks collapsed, the dollar slumped, and yields fell,” said Tony Sycamore, market analyst at IG.

Dollar Rises Against Franc on Tariffs; Switzerland Considers Options

Elsewhere in FX markets, the dollar rose more than 0.5% against the Swiss franc after Trump imposed some of the highest tariffs yet on Switzerland, part of a broader White House effort to reshape global trade.

The euro also gained 0.3% versus the franc.

“We saw a sharp pullback in the franc after the announcement. If these tariffs are sustained, the negative impact on the Swiss economy will be relatively significant,” said Danske Bank’s Elsarraf.

The Swiss government said it would hold a special meeting later Monday to discuss next steps, stating in a press release that it remained open to revisiting its trade proposal to the US.

Gold prices fell in European trading on Monday, retreating from a two-week high reached earlier in the Asian session. The decline came amid profit-taking and a rebound in US dollar strength across currency markets.

Weaker-than-expected US jobs data has increased the likelihood of a Federal Reserve rate cut in September. Investors now await further economic releases and commentary from Fed policymakers to reassess those expectations.

Price Overview

•Gold prices dropped 0.55% to $3,345.14, down from the session’s opening at $3,363.34. The day’s high reached $3,366.15 — the strongest level since July 25.

•On Friday, gold gained 2.2%, its second consecutive daily rise and the biggest single-day gain since June 2, as prices recovered from a four-week low at $3,268.89.

•Beyond bargain buying, Friday’s gains were driven by weak US labor market data and renewed trade tariff concerns involving Trump’s administration.

US Dollar

The US Dollar Index rose 0.3% on Monday, attempting to recover from Friday’s steep losses and reflecting renewed demand for the greenback against a basket of major currencies.

The rebound comes as markets await stronger evidence supporting or refuting the likelihood of a Fed rate cut in September, especially amid continued comments from Fed officials.

US Interest Rate Outlook

•US job growth slowed more than expected in July, with non-farm payrolls rising by 73,000, following a downwardly revised 14,000 increase in June.

•According to CME’s FedWatch tool, the probability of a 25-basis-point rate cut in September rose from 43% to 75%, while the odds of rates staying unchanged dropped from 57% to 25%.

•Expectations for a 25-basis-point cut in October also climbed — from 64% to 95% — while the odds of holding rates steady dropped from 36% to just 5%.

•Following the disappointing jobs data, traders are now pricing in roughly 63 basis points of Fed easing by December, up from 35 basis points previously.

Gold Market Outlook

Tim Waterer, Chief Market Analyst at KCM Trade, stated: “Gold has seen a soft start to the week after Friday’s rally. A mix of profit-taking and dollar stabilization has caused a slight dip in prices at the beginning of the week.”

SPDR Gold Trust Holdings

SPDR Gold Trust — the world’s largest gold-backed ETF — saw holdings decline by 1.43 metric tons on Friday, marking the third consecutive daily drop. Total holdings fell to 953.08 metric tons, their lowest level since July 21.

The euro declined in European trading on Monday against a basket of global currencies, as part of a corrective pullback after Friday’s sharp rally. The single currency gave up a two-week high versus the US dollar due to profit-taking and technical selling.

European inflation figures for July came in hotter than expected, reinforcing inflationary pressures on European Central Bank policymakers and reducing the likelihood of a rate cut in September.

Price Overview

•EUR/USD fell by 0.35% to $1.1550, down from the opening price of $1.1589. The pair recorded a session high of $1.1597 — the highest level since July 28.

•On Friday, the euro surged 1.5% against the dollar, marking its second straight daily gain and its strongest one-day performance since April 10, as it continued to recover from a two-month low of $1.1400.

•In addition to bargain buying at lower levels, Friday’s gains were driven by better-than-expected eurozone inflation data and downbeat US labor market figures.

US Dollar

The US Dollar Index rose by 0.3% on Monday, attempting to recover from Friday’s steep losses, reflecting renewed demand for the greenback against a basket of major currencies.

This rebound comes as markets await further confirmation regarding the likelihood of a Federal Reserve rate cut in September, particularly in light of ongoing remarks from Fed officials.

European Interest Rates

•Eurozone consumer prices rose by 2.0% in July, beating market expectations of a 1.9% increase and matching the previous month’s 2.0% reading.

•The data indicates persistent inflationary pressure on ECB policymakers.

•According to Reuters sources, a clear majority of ECB members favored keeping interest rates unchanged at the upcoming September meeting — for a second consecutive time.

•Market pricing for a 25-basis-point ECB rate cut in September remains below 30%.

•Investors will closely monitor upcoming eurozone data and ECB commentary to reassess those odds.