Oil Prices Rebound as Markets Eye OPEC+ Decision and Russia Sanctions

Highlights:

• Oil Prices Rebound: Brent crude nears US$65 and WTI trades above US$61 at the time of writing, tracking equity market gains.
• OPEC+ Meetings in Focus: The alliance is considering a third consecutive monthly production hike, with decisions expected this week.
• Supply Concerns Emerge: Brent futures curve enters contango, signalling fears of potential oversupply in the market.

Oil Tracks Equity Market Rally

Global oil prices moved higher in tandem with equity markets, as investors awaited key signals from upcoming OPEC+ meetings. At the time of writing, Brent crude was trading close to US$65 per barrel after shedding 1% the previous day, while West Texas Intermediate (WTI) hovered above US$61. The rebound reflects cautious optimism ahead of critical decisions on future oil output.

OPEC+ Committee Set to Convene

Attention is now on the Joint Ministerial Monitoring Committee (JMMC), which is scheduled to meet midweek to assess market conditions. This will be followed by a broader gathering of OPEC+ ministers, led by Saudi Arabia, on Saturday to finalise production targets for July. Delegates suggest the group is considering a substantial increase in oil output for the third straight month, in response to recovering global demand.

Rising Supply Sparks Price Concerns

While a potential boost in production could support economic recovery, it has also raised concerns about a possible supply glut. Some segments of the Brent futures curve are now in contango — a market condition where future prices are higher than current prices, typically indicating oversupply. This bearish structure may weigh on trader sentiment if demand growth does not keep pace.

Geopolitical Risks in Focus

Traders are also closely watching geopolitical developments, particularly the possibility of additional U.S. sanctions on Russia. Tensions around energy exports from the region could further impact market dynamics in the short term.

Outlook Hinges on OPEC+ Strategy

As the OPEC+ alliance navigates a delicate balance between boosting supply and maintaining price stability, markets are bracing for a decision that could shape global oil trends in the coming months.

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