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What’s next? – OIL 05.06.18

Jun 5 2018, 04:09 PM (+06) |

Oil futures recovered in Asian hours on Tuesday despite an increasing US output and expectations of higher production by OPEC.

The US West Texas Intermediate crude contracts rose 0.53 percent to $65.09 per barrel as of 10:00 GMT. Meanwhile, Brent futures were up 0.07 percent at $75.34 a barrel.

Market participants are preparing for the next meeting of the Organization of the Petroleum Exporting Countries (OPEC), which takes place in Vienna on June 22. Members of the cartel and its allies will be discussing whether is a good idea to partially halt output cuts in the light of the US economic sanctions imposed on Iran and Venezuela.

Early rumours pointed out that OPEC and Russia were ready to increase output by 1 million barrels per day. The current agreement stands for a 1.8 million barrels per day reduction and it is expected to finish by the end of 2018.

Market analysts are saying this is nowadays the main driver for oil prices and that it all will come to the decision of OPEC and Russia. That decision will set the market tone and define a direction for months to come.

Last week, oilfield services company Baker Hughes said the total rig count moved to 861 units, adding two to reach its highest level since 2015.

Ahead today, investors await the release of weekly crude estimated by the American Petroleum Institute as of 20:30 GMT. On Wednesday, attention will be directed to official inventories by the US Energy Information Administration at 14:30 GMT.

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