Oil Prices Rise on Forecasts of Supply Deficit
In a market fueled by peak summer fuel consumption and OPEC+ cuts, oil prices climbed on Monday, according to Reuters. Brent crude futures saw a 0.6 percent increase to $85.53 a barrel, while US West Texas Intermediate crude futures were up to $82.05 a barrel.
OPEC+ Cuts and Economic Headwinds
Despite global economic challenges and rising non-OPEC+ output, both contracts experienced a 6 percent gain in June. OPEC+ extended deep oil output cuts into 2025, leading analysts to predict supply deficits in the third quarter due to increased transportation and air-conditioning demand.
Market Analysis and Projections
Analysts from ING noted concerns around US gasoline demand and Chinese apparent demand. However, with factory activity among smaller Chinese manufacturers growing at a rapid pace, hopes of an interest rate cut by the US Federal Reserve, and rising geopolitical tensions, prices are expected to remain stable.
Impact of Hurricanes on Oil Production
Traders are keeping a close eye on the impact of hurricanes on oil and gas production and consumption in the Americas. The Atlantic hurricane season began with Hurricane Beryl, a Category 4 storm, heading towards the Caribbean’s Windward Islands, bringing potential life-threatening conditions.