Oil held steady as traders weighed the uncertain status of nuclear talks between the US and Iran against reports that OPEC+ may extend its run of super-sized production increases.
West Texas Intermediate edged up to settle above $65 a barrel after swinging between gains and losses. Bloomberg reported that several OPEC delegates, who asked not to be identified, said their countries are ready consider another 411,000 barrel-a-day increase for August when they convene on July 6, following similarly sized hikes agreed upon in each of the previous three months.
While that figure is broadly in-line with expectations, “the indications are that the group may go beyond the 411,000 barrel-a-day increase,” said John Kilduff, a partner at Again Capital. “Next, we should hear about the voluntary cuts under-shooting the goal from the group laggards. I expect the ultimate decision to be bearish for prices.”
Crude had earlier advanced as much as 1.3% after US Energy Secretary Chris Wright told Bloomberg that sanctions against Iran will remain in place for now, and US President Donald Trump said he dropped plans to ease Iran sanctions. The statement comes just days after the president claimed that Iran and the US would meet for nuclear talk as soon as next week, which Iran denied.
Oil still ended the week down roughly 13% — snapping three weeks of gains — after a ceasefire in the Israel-Iran conflict was reached, easing concerns about supply disruptions from a region that pumps about a third of the world’s crude.
The focus has largely reverted to fundamental catalysts, including OPEC moves. Russia now also appears more receptive to a fresh output boost, in a reversal of an earlier stance, raising concerns of supply overhang in the second half of the year.
Investors have also turned their attention to progress on US-China trade talks. Commerce Secretary Howard Lutnick said an understanding that was reached last month has been finalized, and China later backed up the assertion. The deal includes language on China delivering rare earths to the US, he told Bloomberg. Officials from both countries have maintained close contact after holding trade talks in London earlier this month, the Chinese Commerce Ministry said Friday.
The trade understanding with China flagged by Lutnick comes ahead of a July 9 deadline for the US to decide whether to impose the “Liberation Day” tariffs on its major trading partners. The commerce secretary added that the White House has imminent plans to reach agreements with 10 major trading partners.
“Oil prices have stabilized at the level seen before the escalation of the Middle East conflict,” Commerzbank analysts including Barbara Lambrecht said in a note. “However, a further expansion of oil supply threatens to become a litmus test.”
Oil Prices
WTI for August delivery climbed 0.4% to settle at $65.52 a barrel in New York.
Brent for August settlement rose 4 cents to settle at $67.77 a barrel.
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