Oil Prices Steady Ahead of OPEC+ Meeting


   
Karim Bastati
DTN Analyst

   VIENNA (DTN) -- Oil futures were steady Monday morning after having reverted 
to pre-war levels, shedding the geopolitical risk premium tied to the 
Israel-Iran war and associated fears of a wider escalation which would affect 
oil supplies in the region. On Sunday, OPEC+ delegates will meet to set 
production quotas for August, with another substantial production hike being in 
the cards.

   NYMEX-traded WTI for August fell $0.08 bbl to trade near $65.44 bbl, and ICE 
Brent for August delivery slid $0.13 bbl to $67.64 bbl.

   July RBOB gasoline futures shed $0.0030 to $2.0868 gallon, while the 
front-month ULSD futures contract advanced $0.0057 to trade near $2.3129 gallon.

   The U.S. dollar index softened 0.166 points to 96.865.

   Market observers are expecting another 411,000-bpd quota increase for 
August, for the fourth consecutive month. The producer group has pivoted 
earlier this year from a strategy solely focused on defending price to one 
defending market share from non-OPEC producers by considerably hiking oil 
output.

   OPEC's strategic shift elevates oversupply risks in the second half of the 
year as global demand growth is trailing supply growth, depending on how much 
of the quota increases will materialize. According to OPEC's latest monthly oil 
market report, OPEC+ collectively produced 180,000 bpd more in May than in 
April, and production from the eight member countries who had agreed to raise 
output by a combined 411,000 bpd was up 153,000 bpd month-on-month.




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