DTN Oil Update
Oil Jumps as OPEC Sticks to Priced-In Output Increase
VIENNA (DTN) -- Oil futures jumped Monday morning after OPEC members on the weekend agreed on a 411,000-bpd production hike in July. Reports on Friday suggested this third consecutive monthly output increase to be much larger, pressuring prices.
NYMEX-traded WTI for July delivery was up $2.87 bbl to trade near $63.66 bbl, and ICE Brent for August delivery rose $2.67 bbl to $65.45 bbl.
July RBOB gasoline futures jumped $0.0680 to $2.0831 gallon, while the front-month ULSD futures contract gained $0.0754 to $2.0808 gallon.
The U.S. Dollar Index softened by 0.564 points to 98.695.
The 411,000-bpd quota hike, identical in size to the ones for May and June, was already largely priced in. The increase is part of the planned rollback of some 2.2 million bpd of voluntary adjustments implemented by eight member countries in addition to the group's production curtailment under the Declaration of Cooperation, better known as OPEC+.
Prices also received support from geopolitical developments. Ukraine on Sunday struck five airfields with drones deep inside Russian territory, reportedly damaging more than 40 strategic bombers ahead of this week's truce talks.
Several manufacturing PMIs are scheduled for release this week, starting with the US ISM Manufacturing Index and the China Caixin Manufacturing PMI Monday. Market participants will parse these macroeconomic indicators for clues on demand growth developments.
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