Oil prices pushed higher by low odds of OPEC+ supply increase

Oil pump cylinders are seen at the Vaca Muerta shale oil and gas field in the Patagonian province of Neuquen, Argentina January 21, 2019. REUTERS/Agustin Marcarian/File Photo

Join now for FREE unlimited access to Reuters.com


  • Brent high since July 5
  • Stocks rise, dollar weakens
  • OPEC+ sources say stable production is top of mind

LONDON, July 29 (Reuters) – Oil prices rose in European trading on Friday as attention turned to next week’s OPEC+ meeting that will dash U.S. hopes of a increase in supply.

The Brent crude futures contract for September settlement, which was due to expire on Friday, gained $2.34 to $109.48 a barrel at 0933 GMT, its highest level since July 5. The more active October contract rose $2.30 to $104.13.

U.S. West Texas Intermediate (WTI) crude futures rose $2.16 to $98.58 a barrel.

Join now for FREE unlimited access to Reuters.com


Both contracts are set for a second monthly loss, however, down 4.6% and 6.8%, respectively.

A weaker dollar and stronger stocks also provided support on Friday. A falling dollar makes oil cheaper for buyers of other currencies.

Global equities (.MIWD00000PUS), which often move in tandem with oil prices, were higher on hopes that US monetary tightening would not be as aggressive as initially expected after disappointing growth figures.

“It certainly feels like we’re in trade-off mode again, where sentiment is shifting between recession risks in H2 and a fundamentally undersupplied (oil) market,” said Stephen Innes, managing partner at SPI Asset Management. .

First-month Brent futures are selling at a rising premium to later loading months, a market structure known as a pullback, indicating a tight current supply.

“The oil market in Europe is considerably tighter than in the United States, which is also reflected in the sharp drop in the Brent futures curve,” said Carsten Fritsch, an analyst at Commerzbank.

A key factor will be the upcoming meeting of the Russian-led Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, on August 3.

OPEC+ sources said the group would consider keeping oil output unchanged for September, with two OPEC+ sources saying a modest increase would be discussed. Read more

A decision not to increase production would disappoint the United States after US President Joe Biden visited Saudi Arabia this month in hopes of striking a deal to open the taps. Read more

Analysts, however, said it would be difficult for OPEC+ to increase supply, given that many producers are already struggling to meet production quotas.

Join now for FREE unlimited access to Reuters.com


Reporting by Shadia Nasralla Additional reporting by Sonali Paul in Melbourne and Jeslyn Lerh in Singapore Editing by David Goodman

Our standards: The Thomson Reuters Trust Principles.

About Catherine Sturm

Check Also

General Electric deliveries still affected by supply chain issues

A woman stands in front of a General Electric (GE) sign during the Global Conference …