OPEC+ Output Decision Reassures Markets
OPEC+ confirmed over the weekend it will stick with its planned July production increase of 411,000 barrels per day—the third month in a row at that level. The decision came after speculation that a larger increase might be on the table. Traders had already priced in the 411,000 bpd move, helping oil avoid a bearish reaction. Analysts noted that a larger-than-expected increase could have sharply undercut prices.
Onyx Capital Group’s Harry Tchilinguirian noted that markets dodged a negative surprise, while PVM’s John Evans pointed to Kazakhstan’s open refusal to cut output as evidence of internal pressures within the group. Still, the move appears aimed at managing a delicate balance: regaining market share without triggering a supply glut.
Goldman Sachs Sees Room for More Increases
Goldman Sachs remains bullish, citing tight spot fundamentals, strong global demand signals, and seasonal summer support. The bank expects OPEC+ to approve one more 410,000 bpd increase for August. Analysts argue that current demand strength makes it unlikely the group will pause production hikes when it meets again on July 6.
U.S. Fuel Inventories Raise Supply Concerns
Low U.S. fuel inventories and the kickoff of the summer driving season are adding upside pressure to prices. ANZ analysts highlighted a sharp jump in gasoline implied demand—up nearly 1 million bpd, marking one of the largest weekly gains in three years. Traders are also keeping an eye on what’s projected to be a more active-than-usual hurricane season, which could further tighten supply.
Market Forecast: Bullish Outlook for Oil Prices
With OPEC+ sticking to a measured production path, demand showing seasonal and structural strength, and U.S. supply risks rising, the market bias remains bullish. A break above $64.40 could trigger momentum buying, targeting the 200-day moving average at $66.62. Until then, any pullbacks are likely to find support near $59.50, offering dip-buying opportunities for traders.
More Information in our Economic Calendar.
