SINGAPORE: Oil futures were little changed on Wednesday as markets weighed expectations from more supply from major producers next month, a softer US dollar and a mixed bag of economic and market indicators from the US, the world’s largest oil consumer.
Brent crude slipped 4 cents to $67.07 a barrel at 9:18 a.m. Saudi time, while US West Texas Intermediate crude fell 9 cents to $65.36 a barrel.
Brent has traded between a high of $69.05 a barrel and low of $66.34 since June 25, as concerns of supply disruptions in the Middle East producing region have ebbed following the ceasefire between Iran and Israel.
Weighing on prices, sources said American Petroleum Institute data late on Tuesday showed US crude oil inventories rose by 680,000 barrels in the past week at a time when stockpiles typically draw amid the summer demand season.
“Today’s oil price moves are being pushed by the interplay of potentially rising OPEC+ supply, confusing US inventory signals, uncertain geopolitical outlook, and macro-policy ambiguity,” said Phillip Nova senior market analyst Priyanka Sachdeva.
However, planned supply increases by the Organization of the Petroleum Exporting Countries and its allies including Russia, know as OPEC+, appear already priced in by investors and are unlikely to catch markets off-guard again imminently, she added.
Four OPEC+ sources told Reuters last week the group plans to raise output by 411,000 barrels per day next month when it meets on July 6, a similar amount to hikes agreed for May, June and July.
The market is already seeing the results of the previous OPEC+ increases with Saudi Arabia, the world’s biggest oil exporter, lifting shipments in June by 450,000 bpd from May, according to data from Kpler, its highest in more than a year.
“With geopolitics at bay for now, oil futures (are likely) to trade within a tighter range this week, as global economic concerns persist, with an ‘easing dollar’ as the only exception to extend any upward traction,” said Sachdeva.
The greenback fell to a 3-1/2-year low against major peers earlier on Wednesday and a weaker dollar would support prices as its could spur demand for buyers paying in other currencies.
US non-farm payrolls data due on Thursday will shape expectations around the depth and timing of interest rate cuts by the Federal Reserve in the second half of this year, said Tony Sycamore, analyst at IG.
Lower interest rates could spur economic activity which would in turn boost oil demand.
Official US oil stockpile data from the Energy Information Administration is due Wednesday at 5:30 p.m. Saudi time.
