Oil prices edged higher on Tuesday as investors took stock of positive demand indicators, while also treading cautiously ahead of an OPEC+ meeting to decide the group‘s August output policy.
Brent crude LCOc1 settled up 37 cents, or 0.6 per cent, at $67.11 a barrel, while US West Texas Intermediate crude CLc1 settled 34 cents higher, or up around 0.5 per cent, at $65.45 a barrel.
The gains were likely due to supportive data from a private-sector survey in China, which showed factory activity returned to expansion in June, said Randall Rothenberg, a risk intelligence expert at US oil brokerage Liquidity Energy.
Expectations that Saudi Arabia will raise its August crude oil prices for buyers in Asia to a four-month high as well as firm premiums for Russian ESPO Blend crude oil were also supporting the notion of robust demand, Rothenberg said.
Oil‘s gains were kept in check by expectations that the OPEC+ group will boost its August crude oil output by an amount similar to the outsized hikes agreed in May, June, and July. Four OPEC+ sources told Reuters last week the group plans to raise output by 411,000 barrels per day next month when it meets on July 6.
“All eyes will be on OPEC+’s decision over the weekend, when the group is expected to add another 411,000 bpd of production in an effort to gain more market share, primarily over the US shale producers,” StoneX energy analyst Alex Hodes told clients.
Besides gaining market share from US shale producers, which pumped oil at a record pace in April, according to official data released on Monday, the group has also been trying to punish overproducing members.
OPEC+ member Kazakhstan, one of the world’s 10 largest oil producers, raised oil production last month to match an all-time high, a source familiar with the data told Reuters on Tuesday.
Saudi Arabia, the de facto leader of the OPEC+ group, raised its June crude oil exports to the fastest rate in a year, data from Kpler showed.
“These exports are flooding out even faster than the OPEC+ deal implies during the summer, when peak domestic demand typically keeps oil supplies closer to home,” Hodes said.
In the US, crude oil inventories rose by 680,000 barrels in the past week, according to sources citing figures from the American Petroleum Institute. Official data from the Energy Information Administration is due Wednesday at 10:30 a.m. ET. API/S
Trump and tariffs
Investors are also watching trade negotiations ahead of US President Donald Trump’s tariff deadline of July 9. Trump on Tuesday said he is not thinking of extending the deadline.
A trade deal with India was very close, Treasury Secretary Scott Bessent said on Tuesday. Trump also said the US will possibly have a deal with India, but he added that he doubts there will be a deal with Japan.
Bessent also warned countries could be notified of sharply higher tariffs despite good-faith negotiations as the July 9 deadline approaches, when tariff rates are scheduled to revert from a temporary 10 per cent level to the ones Trump announced on April 2 and then suspended.
The European Union wants immediate relief from tariffs in key sectors as part of any trade deal with the US, EU diplomats told Reuters.
