LONDON: Oil prices held steady on Monday as Middle East risks eased, while a possible OPEC+ output increase in August and uncertainty over the global demand outlook weighed on the market.
Brent crude futures edged down by 13 cents, or 0.2 percent, to $67.64 a barrel at 2:17 p.m. Saudi time, ahead of the August contract’s expiry later on Monday. The more active September contract was down 5 cents at $66.75. US West Texas Intermediate crude was down 13 cents, or 0.2 percent, at $65.39 a barrel.
The Brent and WTI benchmarks posted their biggest weekly declines since March 2023 last week but are set for a second consecutive monthly gain of more than 5 percent.
A 12-day war that started with Israel targeting Iran’s nuclear facilities on June 13 sent prices above $80 a barrel before sliding back to $67.
The market is back to a range-trading environment that is likely to continue until new economic growth concerns emerge or supply disruptions materialize, said UBS analyst Giovanni Staunovo.
Four OPEC+ sources told Reuters last week that the group was set to boost production by 411,000 barrels per day (bpd) in August after similar increases for May, June and July.
“I believe this potential supply pressure remains under-priced, leaving crude vulnerable to further weakness,” said Ole Hansen, head of commodity strategy at Saxo Bank.
“Soon we will enter the demand shoulder season where OPEC+ increases will become much more visible, and harder to ignore.”
The oil producer group is set to meet on July 6.
However, some market tightness remains despite rising output, with lower-than-expected production increases, while exports from OPEC+ countries have remained stable, Staunovo added.
A Reuters survey found that OPEC oil output rose in May, but gains were limited by cuts by countries that had previously exceeded their quotas, while Saudi Arabia and the UAE made smaller increases than allowed.
Bearish pressure is likely to persist on concerns over slower global oil demand, particularly from leading crude importer China, some analysts say.
Uncertainty around global growth continues to cap prices, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
