Oil prices barely changed amid expectations of increased OPEC+ supplies

Oil prices barely moved on Wednesday, as markets weighed expectations of increased supply from major producers next month, due to a weaker US dollar and a mixed package of economic and market indicators from the US, the world’s largest oil consumer, writes UNN with reference to Reuters.

DetailsBrent crude rose 2 cents to $67.13 per barrel at 03:45 GMT (06:45 Kyiv time), while US West Texas Intermediate crude fell 1 cent to $65.44 per barrel.

Brent crude has traded between a high of $69.05 per barrel and a low of $66.34 since June 25, as fears of supply disruptions in the Middle East production region eased following a ceasefire between Iran and Israel.

Also, according to sources, data from the American Petroleum Institute on Tuesday evening showed that US crude inventories rose by 680,000 barrels last week, while inventories usually decline during the summer demand period.

“Today’s oil price movements are driven by the interplay of potentially rising OPEC+ supplies, confusing signals about US inventories, uncertain geopolitical prospects, and macro policy ambiguity,” said Phillip Nova Senior Market Analyst Priyanka Sachdeva.

However, the planned increase in OPEC+ supply seems to have already been priced in by investors and is unlikely to catch markets by surprise again soon, she added.

Four OPEC+ sources told Reuters last week that the group plans to increase output by 411,000 barrels per day next month when it meets on July 6, similar to the increases agreed for May, June, and July.

The market is already seeing the results of the previous OPEC+ supply ramp-up, with Saudi Arabia, the world’s largest oil exporter, increasing supplies in June by 450,000 barrels per day from May, according to Kpler data, the highest figure in more than a year.

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“With geopolitics off the table for now, oil futures (likely) will trade in a tighter range this week as global economic concerns persist, with a ‘weaker dollar’ being the only exception to continue the upward trend,” Sachdeva said.

Earlier on Wednesday, the dollar fell to a 3.5-year low against major peers, and a weaker dollar will support prices as it could stimulate demand from buyers paying in other currencies.

US non-farm payroll data, due to be released on Thursday, will shape expectations for the depth and timing of interest rate cuts by the Federal Reserve in the second half of this year, said IG analyst Tony Sycamore.

Lower interest rates could stimulate economic activity, which in turn would increase demand for oil.

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