Oil prices remained stable in early Asian trading as markets anticipated an upcoming OPEC+ meeting where maintaining voluntary output cuts for the rest of the year will be discussed. Brent crude and West Texas Intermediate (WTI) crude prices saw slight increases, while trading was expected to be light due to public holidays. OPEC+ is likely to extend output cuts, affecting global oil demand and inflation.
Oil prices were in a holding pattern in early Asian trading on Monday as markets awaited an OPEC+ meeting on June 2 where producers are expected to discuss maintaining voluntary output cuts for the rest of the year.
The Brent crude July contract inched up 11 cents to $82.23 a barrel by 0036 GMT. The more-active August contract LCOc2 rose 13 cents to $81.97.
U.S. West Texas Intermediate (WTI) crude futures rose 13 cents to $77.85.
Public holidays in the U.S. and UK on Monday were expected to keep trading relatively thin.
The upcoming meeting of the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, was pushed back by a day to June 2 and will be held online, OPEC said on Friday.
The producers will discuss whether to extend voluntary output cuts of 2.2 million barrels per day into the second half of the year, with three sources from OPEC+ countries saying an extension was likely.
Combined with another 3.66 million bpd of production cuts valid through the end of the year, the output cuts are equivalent to nearly 6% of global oil demand.
OPEC has said it expects another year of relatively strong oil demand growth of 2.25 million bpd, while the International Energy Agency expects much slower growth of 1.2 million bpd.
ANZ analysts said in a note that they will be watching gasoline usage as the Northern Hemisphere enters summer, traditionally a high season for driving holidays.
“While U.S. holiday trips are expected to hit a post-COVID high, improved fuel efficiency and EVs could see oil demand remain soft,” the analysts said. But they added that could be offset by rising air travel.
Markets will also be watching the U.S. personal consumption expenditures (PCE) index this week for more signals about interest rate policy. The index, due to be released on May 31, is reportedly the U.S. Federal Reserve’s preferred measure of inflation.
Brent ended last week about 2% lower and WTI lost nearly 3% in the week after meeting minutes from the Federal Reserve showed some officials would be willing to tighten interest rates further if they believed it was necessary to control persistent inflation.
The prospect of higher-for-longer interest rates has strengthened the U.S. dollar, making oil more expensive for holders of other currencies.
The world continues to closely monitor the oil markets as all eyes turn towards the upcoming OPEC+ meeting. In recent days, oil prices have shown little movement, reflecting the anticipation and uncertainty surrounding the decisions that will emerge from this crucial gathering of major oil-producing nations and their allies. Analysts and investors are paying close attention to any signs of potential shifts in production levels, which could have significant implications for global oil prices and market dynamics.
The OPEC+ meeting is set to address the ongoing challenges and opportunities within the oil sector, particularly in the context of evolving global energy demands and geopolitical considerations. As discussions unfold, the outcome of the meeting is expected to have far-reaching consequences for various stakeholders, including oil producers, consumers, and the broader financial markets.
Industry experts emphasize that the decisions made at the OPEC+ meeting could influence the trajectory of oil prices in the near term and beyond. With the delicate balancing act between supply and demand continuing to shape the oil market landscape, all eyes are on the developments unfolding in the lead-up to the highly anticipated gathering.
In the midst of this pivotal juncture, market participants and observers are closely following the latest developments and indicators, seeking insights into the potential outcomes and ramifications that could unfold post-meeting. The dynamic nature of the oil industry underscores the fluidity of global energy markets, making it essential for stakeholders across the board to stay informed and agile in navigating the evolving landscape.
As the world waits in anticipation for the decisions emanating from the OPEC+ meeting, the global oil markets remain in a state of flux, with various factors and forces at play. The implications of the meeting will reverberate widely across the international oil landscape, shaping the future trajectory of oil prices and market dynamics. Stay tuned as we continue to monitor and analyze the developments stemming from this pivotal event.
Source: ARY NEWS
Oil prices held steady ahead of the OPEC+ meeting on June 2, where discussions about maintaining voluntary output cuts for the rest of the year are expected. Brent crude and WTI crude futures saw marginal increases. The meeting will address the potential extension of output cuts, equivalent to nearly 6% of global oil demand. Market attention is also on gasoline usage, U.S. PCE index, and the impact of interest rate policy on oil prices. The U.S. dollar’s strength has made oil more expensive for holders of other currencies.
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