Oil Swings Near $64 as Traders Weigh OPEC+ Plans, Russia Risk
Oil edged higher in a choppy session as the market juggled the outlook for more OPEC+ supply and the risk of additional US sanctions on Russia.
Brent traded above $64 after closing 1% lower on Tuesday. OPEC+ will gather online on Wednesday to review production quotas for this year and next, before eight key members decide at the weekend whether to bolster output again in July.
Members held preliminary talks last week on making a large production hike for a third consecutive month, according to delegates.
President Donald Trump, meanwhile, warned in a social media post on Tuesday that Russian leader Vladimir Putin was “playing with fire” as the US weighed whether to target Moscow with additional sanctions.
The ramp up of idled production by OPEC and its allies has stoked fears about oversupply and added to the pressure on prices. Parts of the futures curve for Brent are in contango — a bearish structure that signals ample supply.
“From a macro perspective, it is a wait and see game in terms of risk appetite, with oil hesitant to follow higher equities even as long-dated US and Japanese yields came down,” said Harry Tchilinguirian, group head of research at Onyx Capital Group. “Right now there are downside fundamentals to the flat price, with the possibility of another voluntary cut unwind from OPEC.
Oil has trended lower since mid-January, with sweeping tariffs from the Trump administration and retaliatory measures from targeted countries adding to bearish headwinds, raising concerns over an economic slowdown. However, there has been some signs recently of easing trade tensions.
Source: Bloomberg
