DTN Oil Update
Oil Prices Steady Ahead of OPEC+ Meeting
VIENNA (DTN) -- Oil futures were steady Monday morning after having reverted to pre-war levels, shedding the geopolitical risk premium tied to the Israel-Iran war and associated fears of a wider escalation which would affect oil supplies in the region. On Sunday, OPEC+ delegates will meet to set production quotas for August, with another substantial production hike in the cards.
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NYMEX-traded WTI for August fell $0.08 barrel (bbl) to trade near $65.44 bbl, and ICE Brent for August delivery slid $0.13 bbl to $67.64 bbl.
July RBOB gasoline futures shed $0.0030 to $2.0868 gallon, while the front-month ULSD futures contract advanced $0.0057 to trade near $2.3129 gallon.
The U.S. Dollar Index softened 0.166 points to 96.865.
Market observers are expecting another 411,000-barrels-per-day (bpd) quota increase for August, for the fourth consecutive month. The producer group has pivoted earlier this year from a strategy solely focused on defending price to one defending market share from non-OPEC producers by considerably hiking oil output.
OPEC's strategic shift elevates oversupply risks in the second half of the year as global demand growth is trailing supply growth, depending on how much of the quota increases will materialize. According to OPEC's latest monthly oil market report, OPEC+ collectively produced 180,000 bpd more in May than in April, and production from the eight member countries who had agreed to raise output by a combined 411,000 bpd was up 153,000 bpd month-on-month.