Oil prices were relatively stable on Wednesday as the markets assessed expectations of increased supply from major producers in the coming month, a weaker U.S. dollar, and a range of mixed economic and market signals from the U.S., the largest oil consumer globally.
Brent crude rose by 2 cents to $67.13 a barrel at 03:45 GMT (currently trading at $67.15), while U.S. West Texas Intermediate crude decreased by 1 cent to $65.44 a barrel (currently trading at $65.46). Brent has fluctuated between a peak of $69.05 a barrel and a low of $66.34 since June 25, as worries over supply disruptions in the Middle East have diminished following the ceasefire between Iran and Israel.
U.S. crude inventories rise
Adding pressure on prices, sources indicated that American Petroleum Institute data released late on Tuesday revealed U.S. crude oil inventories increased by 680,000 barrels over the past week, a period when stockpiles typically decline due to summer demand.
“Today’s oil price moves are being pushed by the interplay of potentially rising OPEC+ supply, confusing U.S. inventory signals, uncertain geopolitical outlook, and macro-policy ambiguity,” reported Reuters, citing Phillip Nova senior market analyst Priyanka Sachdeva.
However, the anticipated supply increases from the Organization of the Petroleum Exporting Countries and its allies, including Russia—collectively known as OPEC+—seem to have already been factored into investors’ pricing, making it unlikely for markets to be surprised again in the near future, she noted.
Four OPEC+ sources informed Reuters last week that the group intends to boost output by 411,000 barrels per day next month during their meeting on July 6, mirroring the increases agreed upon for May, June, and July.
The market is already observing the effects of the previous OPEC+ increases, with Saudi Arabia, the largest oil exporter worldwide, increasing shipments in June by 450,000 bpd from May, according to data from Kpler, marking the highest levels in over a year.
“With geopolitics at bay for now, oil futures (are likely) to trade within a tighter range this week, as global economic concerns persist, with an ‘easing dollar’ as the only exception to extend any upward traction,” Sachdeva stated.
Read more: Crude oil prices dip over 0.2 percent, settle above $66.45 amid OPEC+ and tariff concerns
Upcoming non-farm payrolls data
The U.S. dollar fell to a 3-1/2-year low against major currencies earlier on Wednesday, and a weaker dollar could support prices by enhancing demand from buyers using other currencies.
U.S. non-farm payrolls data set to be released on Thursday will influence expectations regarding the depth and timing of interest rate cuts by the Federal Reserve later this year, according to Tony Sycamore, an analyst at IG.
Lower interest rates could stimulate economic activity, which would subsequently boost oil demand. Official U.S. oil stockpile data from the Energy Information Administration is expected on Wednesday at 10:30 a.m. ET.
Oil prices experienced a decline on Tuesday, driven by expectations of an OPEC+ output increase in August and concerns about an economic slowdown resulting from potential higher U.S. tariffs. Brent crude futures for September delivery fell by 16 cents, or 0.24 percent, concluding at $66.58 a barrel by 00:00 GMT. West Texas Intermediate crude saw a decrease of 20 cents, or 0.31 percent, bringing it to $64.91 a barrel.Â
