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Picture: 123RF/IGOR SHKVARA
Picture: 123RF/IGOR SHKVARA

Singapore — Oil futures were little changed on Wednesday as markets weighed the expectation of more supply from major producers next month, a softer dollar and a mixed bag of economic and market indicators from the US, the world’s largest oil consumer.

Brent crude was up 2c at $67.13 a barrel at 3.45am GMT, while US West Texas Intermediate (WTI) crude fell 1 cent to $65.44 a barrel.

Brent has traded between a high of $69.05 a barrel and low of $66.34 since June 25, as concern of supply disruptions in the Middle East producing region have ebbed after the ceasefire between Iran and Israel.

Also weighing on prices, sources said American Petroleum Institute (API) data late on Tuesday showed US crude oil inventories rose by 680,000 barrels in the past week at a time when stockpiles typically draw amid the summer demand season.

“Today’s oil price moves are being pushed by the interplay of potentially rising Opec+ supply, confusing US inventory signals, uncertain geopolitical outlook, and macro-policy ambiguity,” said Phillip Nova senior market analyst Priyanka Sachdeva.

However, planned supply increases by oil cartel Opec and its allies including Russia, know as Opec+, appeared already priced in by investors and were unlikely to catch markets off-guard again imminently, she said.

Four Opec+ sources told Reuters last week the group planned to raise output by 411,000 barrels a day (bbl/day) next month when it met on July 6, a similar amount to hikes agreed for May, June and July.

The market is already seeing the results of the previous Opec+ increases with Saudi Arabia, the world’s biggest oil exporter, lifting shipments in June by 450,000bbl/day from May, according to data from Kpler, its highest in more than a year.

“With geopolitics at bay for now, oil futures [are likely] to trade within a tighter range this week, as global economic concerns persist, with an ‘easing dollar’ as the only exception to extend any upward traction,” said Sachdeva.

The greenback fell to a three-and-a-half-year low against major peers earlier on Wednesday and a weaker dollar would support prices as its could spur demand for buyers paying in other currencies.

US nonfarm payrolls data due on Thursday would shape expectations around the depth and timing of interest rate cuts by the Federal Reserve in the second half of this year, said Tony Sycamore, analyst at IG.

Lower interest rates could spur economic activity which would in turn boost oil demand.

Official US oil stockpile data from the Energy Information Administration is due Wednesday.

Reuters

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