OIL PRICES CLIMB 1% AS DEMAND STAYS STRONG DESPITE OPEC+ SURPRISE SUPPLY BOOST.
EL-ZION NEWS
The oil market rose by 1 per cent on Monday as strong demand signals outweighed concerns over a larger-than-expected output increase by OPEC+ for August and potential impacts from US tariffs.
Brent crude futures added 91 cents, or 1.3 per cent, closing at $69.20 per barrel, while US West Texas Intermediate (WTI) crude futures climbed 57 cents, or 0.8 per cent, to $67.57 per barrel.
Stronger-than-expected demand was also reported following a record number of Americans travelling by road and air during the Fourth of July holiday.
OPEC+ announced on Saturday a planned output increase of 548,000 barrels per day in August, surpassing the previous monthly hikes of 411,000 barrels per day seen over the last three months.
This move would restore nearly 80 per cent of the 2.2 million barrels per day in voluntary cuts from eight member nations.
The decision marks “a clear shift by the cartel toward a market share strategy” and comes as a response to overproduction by Kazakhstan and Iraq, who have exceeded their assigned quotas.
Market analysts believe these countries are unlikely to raise production much further beyond levels seen in the first quarter.
With the fresh hike, Saudi Arabia may be seeking to pressure other members into compliance by limiting oil revenues through lower prices. Additionally, Saudi Arabia increased the August price of its Arab Light crude to a four-month high for Asian markets.
Goldman analysts predict OPEC+ will likely announce a final production increase of 550,000 barrels per day for September at its next meeting scheduled for August 3.
Meanwhile, uncertainty persisted as US officials delayed revealing when new tariffs would be implemented and gave no clarity on rate changes. Investors are concerned that steeper tariffs could negatively impact economic activity and oil demand.
The US administration is expected to make several trade-related announcements within 48 hours.
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