WTI crude oil prices remained stable during Monday’s Asian session, holding near recent levels at $64.80 per barrel. The stability was supported by easing geopolitical tensions in the Middle East and growing expectations of an imminent production increase by the OPEC+ alliance.
This price stability follows signs of reduced tensions in the region, which have alleviated concerns about potential disruptions to oil supply. Analysts believe the easing of tensions has helped to reduce the geopolitical risk premium previously priced into the market, thereby putting downward pressure on prices in the short term.
At the same time, markets are closely watching the anticipated decision by OPEC+ to raise output by approximately 411,000 barrels per day in August. This would mark the fifth consecutive monthly increase since the group began gradually unwinding prior production cuts in April. The upcoming increase is part of ongoing efforts to strike a balance between maintaining market stability and supporting price levels that benefit producers without harming the global economic recovery. OPEC+ is scheduled to meet on July 6 to discuss upcoming production policies.
On the other hand, positive economic data from China may help offset some of the downward pressure on oil prices. Recent indicators showed a modest improvement in the performance of the world’s second-largest economy. The official manufacturing PMI rose to 49.7 in June, up from 49.5 in the previous month and in line with expectations. Meanwhile, the non-manufacturing PMI increased to 50.5, signaling expansion in this critical sector.
Experts believe the improved economic indicators from China could strengthen oil demand in the coming period, particularly if the gradual recovery in the industrial and service sectors continues. This potential uptick in demand may provide a cushion for oil prices against the headwinds of increased supply and diminishing geopolitical risks.
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