Will the OPEC+ Output Hike Cap Gains in Oil Prices?
Oil prices held steady on Tuesday as markets anticipate OPEC+ to announce a 411,000 barrels per day production hike for August during its July 6 meeting. If approved, this would bring the group’s total 2025 increase to 1.78 million bpd, equivalent to over 1.5% of global demand, keeping the market well supplied despite recent geopolitical tensions.
Saxo Bank noted that while potential trade deals could improve demand sentiment, the “accelerated rate of output increases” from OPEC+ remains a core concern for bullish traders. Rising supply could act as a ceiling near $67.44 unless stronger demand signals emerge.
Saudi Arabia’s Expected August OSP Hike Could Support Prices
Traders are closely watching Saudi Aramco’s August official selling prices (OSPs) for Asian buyers, expected to rise by 50-80 cents per barrel to a four-month high on robust summer demand and recent spot market strength. Arab Light may increase to $1.70–$2 above Oman/Dubai benchmarks, setting a price tone for nearly 9 million bpd of Middle Eastern crude bound for Asia.
Refiners in Asia have already requested additional term supplies for August and September, citing stronger summer fuel demand. However, rising OPEC+ supplies could counteract these gains, keeping oil within its consolidation band unless demand materially strengthens.
Geopolitical Tensions Ease but Trade Risks Remain
While the Israel-Iran ceasefire helped pull Brent down from highs above $80 to $67, traders remain alert as the July 9 U.S. tariff deadline approaches, with potential higher tariffs risking demand growth. Morgan Stanley expects Brent to retrace toward $60 by early next year as geopolitical risks abate and oversupply concerns persist.
Crude Oil Outlook: Cautiously Bullish If Catalysts Align
Crude oil prices remain in a tight consolidation, with near-term direction hinging on OPEC+ output decisions, Saudi OSPs, and the demand impact from trade policies. A clear breakout above $67.44 could open upside toward $71.20, but rising supply and tariff risks may cap gains, keeping the market in a cautious but constructive holding pattern.
