Oil Futures Steady as Market Weighs OPEC+ Supply Outlook, Soft Dollar, and Mixed U.S. Data
Oil prices were little changed on Wednesday as traders balanced the prospect of increased output from major producers next month, a weaker U.S. dollar, and mixed economic signals from the United States—the world’s top oil consumer.
Brent crude edged down 4 cents to $67.07 per barrel by 0618 GMT, while U.S. West Texas Intermediate (WTI) dipped 9 cents to $65.36.
Since June 25, Brent has traded within a narrow range of $66.34 to $69.05, as fears of supply disruptions in the Middle East have eased following the Iran-Israel ceasefire.
Weighing on prices, data from the American Petroleum Institute (API) released Tuesday showed an unexpected 680,000-barrel rise in U.S. crude inventories—a time when stockpiles usually decline due to strong summer demand.
“Today’s price action is being driven by a complex mix of rising OPEC+ supply expectations, unclear U.S. inventory signals, a murky geopolitical landscape, and uncertain macroeconomic policy,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.
However, Sachdeva noted that the anticipated OPEC+ supply hike is already largely priced into the market. According to four sources cited by Reuters, the group is planning to boost output by 411,000 barrels per day in August, consistent with similar increases in May, June, and July.
Data from Kpler indicates that Saudi Arabia—the world’s top oil exporter—raised its exports by 450,000 bpd in June, the highest monthly increase in over a year, reflecting earlier OPEC+ production gains.
“With geopolitical risks temporarily subdued, oil prices are likely to trade in a tighter range this week,” Sachdeva added. “The only clear upward driver right now is the weaker dollar.”
The U.S. dollar slipped to a three-and-a-half-year low against major currencies earlier on Wednesday. A weaker dollar tends to support oil prices by making the commodity cheaper for buyers using other currencies.
Traders are also awaiting key U.S. non-farm payrolls data, due Thursday, which could influence expectations for how soon and how aggressively the Federal Reserve may begin cutting interest rates later this year, said Tony Sycamore, analyst at IG. Lower rates could stimulate economic activity and, in turn, boost oil demand.
The official weekly U.S. crude inventory report from the Energy Information Administration (EIA) is scheduled for release at 10:30 a.m. Wednesday.
