Oil Rises as Traders Weigh Supply Outlook, Russia Sanctions
Oil rose as the market weighed the prospect of more OPEC+ supply and the prospect of additional U.S. sanctions on Russia.
Brent traded above $64 after closing 1% lower on Tuesday, while West Texas Intermediate neared $61. An OPEC+ committee, which monitors developments in the market, met on Wednesday before a group led by Saudi Arabia meets on Saturday to decide on output policy for July.
Members held preliminary talks last week to make a big output increase for a third straight month, delegates said.
The idle production increase by OPEC and its allies has stoked concerns about oversupply and added pressure on prices. Part of the Brent futures curve is in a bearish contango structure that signals ample supply. “Crude oil fundamentals are still under significant pressure,” said Gao Jian, an analyst at Shandong-based Qisheng Futures Co. “The early-session rally could be driven by improving macro risk sentiment.”
Oil has been trending lower since mid-January, with the Trump administration’s massive tariffs and retaliatory actions from targeted countries adding to bearish headwinds, raising concerns about an economic slowdown.
However, there have been some recent signs of easing trade tensions. Meanwhile, President Donald Trump warned in a social media post on Tuesday that Russian leader Vladimir Putin was “playing with fire,” as the U.S. weighs whether to target Moscow with additional sanctions. Brent for July settlement rose 0.5% to $64.44 a barrel at 1:27 p.m. in Singapore. WTI for July delivery rose 0.6% to $61.25 a barrel.
Source: Bloomberg
