Oil Prices Steady As Market Weighs OPEC+ Supply Outlook And US Economic Signals

Crude oil prices hovered near previous levels on Wednesday as traders evaluated the prospect of increased output from key producers, signs of rising US stockpiles, and broader economic signals. The slight movements in prices came amid a backdrop of geopolitical stability and ongoing speculation around macroeconomic policy changes in the US.

Around 9:15 AM, Brent crude edged up by 2 cents to trade at $67.13 per barrel, while US West Texas Intermediate (WTI) crude slipped marginally by 1 cent to $65.44 a barrel, reported Reuters.

Since June 25, Brent has moved within a narrow band, reaching as high as $69.05 and as low as $66.34. The relative calm in oil markets follows eased tensions in the Middle East, particularly after a ceasefire between Iran and Israel reduced fears of regional supply disruptions.

OPEC+ Output Plans, Inventory Data Keep Investors Cautious

Expectations of further output from the Organisation of the Petroleum Exporting Countries and allies including Russia—collectively known as OPEC+—have been a key influence on current price levels. “Today’s oil price moves are being pushed by the interplay of potentially rising OPEC+ supply, confusing US inventory signals, uncertain geopolitical outlook, and macro-policy ambiguity,” said Phillip Nova senior market analyst Priyanka Sachdeva.

Although supply increases have been anticipated, Sachdeva noted they are “already priced in by investors and are unlikely to catch markets off-guard again imminently.” According to Reuters, four OPEC+ sources indicated the group aims to raise production by 411,000 barrels per day in July, similar to the increases agreed upon for the previous three months. Saudi Arabia, the top global exporter, boosted shipments in June by 450,000 barrels per day from May, reaching its highest level in over a year, data from Kpler showed.

Adding further pressure, the American Petroleum Institute reported a surprise build in US crude inventories, which rose by 680,000 barrels last week—an unusual trend during the peak summer demand period.

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Dollar Weakness and US Data in Focus

Meanwhile, a softening US dollar provided some support for oil prices. The greenback touched its lowest level in three and a half years against a basket of major currencies earlier on Wednesday. A weaker dollar often supports oil prices as it lowers costs for buyers using other currencies, potentially increasing global demand.

Looking ahead, upcoming US economic data could influence expectations around monetary policy. “US non-farm payrolls data due on Thursday will shape expectations around the depth and timing of interest rate cuts by the Federal Reserve in the second half of this year,” said Tony Sycamore, analyst at IG. Any move towards lower interest rates could stimulate economic activity, which may, in turn, lift energy demand.