Brent holds steady as OPEC+ July supply target meets market expectations

The front-month ICE Brent contract has gained by $0.08/bbl on the day from Friday, to trade at $64.68/bbl at 09.00 GMT.

IMAGE: Getty Images

Upward pressure:

Brent futures have found some support after eight OPEC+ members—Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria and Oman—agreed to increase their combined oil supply by 411,000 b/d in July, compared to June's production levels. This move came as a relief to market participants who had anticipated a larger supply boost.

“Crude futures were trading… higher early Monday… after the OPEC/non-OPEC Group of 8 on Saturday decided to raise their combined production target by 411,000 b/d for July, avoiding a more bearish course of action,” said Vandana Hari, founder and analyst at Vanda Insights.

“The latest increase is in line with our expectations,” two analysts from ING Bank commented.

Meanwhile, data from the US Energy Information Administration (EIA) showed that US fuel oil production in May averaged 8% less per day compared to April.

This decline, along with low US fuel inventories and concerns about an above-average hurricane season, has added to market supply jitters and contributed to upward pressure on prices.

Downward pressure:

Kazakhstan has notified OPEC that it does not plan to cut its oil production, according to a Thursday report by Russia's Interfax news agency, citing Kazakhstan's deputy energy minister, Reuters reported.

The announcement has put some downward pressure on Brent's price.

By Tuhin Roy

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