Oil prices eked out gains this week, a sign that the market has largely shrugged off the larger-than-expected output hike announced on Saturday by the Organization of the Petroleum Exporting Countries and allies. Despite the current tightness, forecasters are pointing out that supply growth is at risk of outpacing demand later in the year.
Tanker tracking by Bloomberg shows that the Gulf state’s crude exports surged to a 19-month high in June as the OPEC+ alliance brought curbed barrels back. Most of Kuwait’s oil flows to Asian countries, including China, Japan and South Korea. Sheikh Nawaf said recent demand has been driven by Asia in particular, noting that KPC’s global business partners have been asking the company if it has additional barrels.
The total number of active drilling rigs for oil and gas in the United States fell yet again this week, according to new data that Baker Hughes published on Friday, following a 1-rig decrease in the week prior.
West Texas Intermediate gained 2.8% to settle near $63 a barrel after the Organization of the Petroleum Exporting Countries and its allies agreed on Saturday to add 411,000 bpd of supply in July though some members objected, including Russia. With a handful of countries lobbying for a pause in July, banks are now split on how many more hikes will come in subsequent months.
The eight OPEC+ nations that contributed to voluntary production cuts are set to meet on Friday to discuss production strategy for July. Commodity strategists at Standard Chartered have predicted that we are likely to see more of the same, with the group adding another 411 thousand barrels per day to July targets and cumulative unwinding now clocking in at 1.4 mb/d.
Entso-e, the association of EU transmission system operators, released a report on Monday evaluating bidding zone configurations with the purpose of establishing “optimal bidding zone configurations in Europe to maximize economic efficiency and cross-zonal trading opportunities, while maintaining security of supply.”
Most market attention at the moment remains focused on Trump’s plan to announce sweeping “Liberation Day” tariffs later on Wednesday, with no details, creating a situation that has the market guessing and preparing to panic over the prospect of a global trade war.