Tuesday saw a small increase in oil prices, recouping some of its earlier losses after surging by more than $5 a barrel the previous day due to supply fears.
By 0645 GMT, Brent oil futures for September settlement were up 17 cents to $106.51 per barrel. The price of a barrel of WTI oil for August delivery increased by 36 cents to $102.96. Wednesday marks the expiration of the August WTI contract, while the more popular September future was trading at $99.74 a barrel, up 32 cents.
According to a senior market analyst at OANDA, Jeffrey Halley, the fundamental supply/demand mismatch is as tight as ever. Oil prices may have peaked, but they don’t appear to be much down from here until OPEC+ gives us a massive surprise.
Last week, U.S. President Joe Biden traveled to Saudi Arabia, the world’s largest oil exporter, to agree on increasing oil output to lower fuel costs. Officials from Saudi Arabia, the Organization of the Petroleum Exporting Countries (OPEC)’s a facto leader, did not make it plain that a rise in output was certain.
The market has had time to process President Biden’s visit. According to Warren Patterson, head of commodities strategy at ING, it is doubtful that OPEC and its partners, including Russia, collectively known as OPEC+, will boost output more aggressively than anticipated soon. The recent decline of the dollar, which was at a one-week low, supported oil prices and made it slightly more affordable for purchasers using other currencies to purchase oil with the greenback.
An early poll predicted that gasoline stocks likely decreased last week. Still, crude and distillate supplies may have increased in the United States, the world’s largest oil consumer.
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