OPEC+ Announces Further Production Increase, Crude Oil Prices Likely to Drop
Trending Articles- Gold Price Forecast: Gold May Break $4,500 as Fed Rate-Hike Expectations Continue to Cool
- Gold gains momentum to near $4,400 as Fed hike expectations drop despite Us-Iran tensions
- US Treasury Department to buy back more longer-term bonds
- Gold Price Forecast: Will Gold Rise or Fall in the Short Term as Fed July Minutes Approach?
- Gold Price Forecast: US Treasury Yield Slump Pushes Gold Above $4,500, Will Gold Keep Rising?
- Australian Dollar gains as US Dollar struggles amid fading Fed rate hike bets
West Texas Intermediate (WTI), the U.S. crude benchmark, rose slightly on Monday, trading around $65 a barrel.
WTI prices are still about $12 below the previous Monday's high, as prices lack upward momentum due to easing Middle East peace tensions and OPEC+ members expecting another increase in production in August.
Source: TradingView
WTI prices fell more than 12% in the five trading days last week, the biggest weekly drop since March 2023.
The conflict between Israel and Iran pushed oil prices up sharply last week; however, geopolitical risks in the Middle East were greatly reduced as both sides announced a ceasefire.
Goldman Sachs options data show that the market currently expects only a 4% chance of supply disruptions. This means that WTI crude oil prices will be dragged down in the short term. Data shows that traders set WTI price expectations in a more stable range of $60 to $69 per barrel in the coming months.
IG market analysts said that after the ceasefire between Iran and Israel, the market has removed most of the geopolitical risk premium from the price.
In addition, the news of increased oil production further hit the upward momentum of WTI prices.
The Organization of Petroleum Exporting Countries and its allies (OPEC+) said it would increase daily production by 411,000 barrels in August, similar to the previous increases in May, June, and July. OPEC+ is scheduled to meet on July 6, which will be the fifth monthly rate hike since the organization began to gradually lift production cuts in April.
However, since China is the world's second-largest oil and gas consumer, optimistic Chinese economic data may provide some support for oil prices.
Data released on Monday showed that China's official manufacturing purchasing managers' index (PMI) rose to 49.7 in June, from 49.5 in the previous month. This data is in line with market expectations. At the same time, the National Bureau of Statistics' non-manufacturing PMI rose to 50.5 in June, from 50.3 in the previous month and 50.3 in expectations.
Read more
Before making any trading decisions, it is important to equip yourself with sufficient fundamental knowledge, have a comprehensive understanding of market trends, be aware of risks and hidden costs, carefully consider investment targets, level of experience, risk appetite, and seek professional advice if necessary.
Furthermore, the content of this article is solely the author's personal opinion and does not necessarily constitute investment advice. The content of this article is for reference purposes only, and readers should not use this article as a basis for any investment decisions.
Investors should not rely on this information as a substitute for independent judgment or make decisions solely based on this information. It does not constitute any trading activity and does not guarantee any profits in trading.
If you have any inquiries regarding the data, information, or content related to Mitrade in this article, please contact us via email: insights@mitrade.com. The Mitrade team will carefully review the content to continue improving the quality of the article.
