OPEC+ may raise oil output quotas by 188K BPD in August. This move follows a gradual unwinding of voluntary cuts and could impact crude prices, which have fallen but remain above pre-conflict levels.
In a development that could influence global energy markets, Reuters reports OPEC+ is likely to increase oil output quotas by 188K BPD for August. The decision comes as part of the organization's ongoing efforts to gradually restore production after voluntary cuts were implemented earlier this year.
This potential increase would continue the gradual monthly rise in output that began with a 642,000 BPD boost in April and continued through May with another 188K BPD. If OPEC+ adheres to these plans, it will be on track to fully restore all remaining voluntary cuts over coming months.
The decision's impact on oil prices is expected to shift focus away from the quota increase itself toward broader market dynamics. Currently, crude oil has fallen to a new cycle low of $68.22 per barrel since the start of the Iran conflict, underscoring how much geopolitical risk premium has been unwound.
Despite lower crude prices, gasoline retail prices have not declined as significantly. As of the latest data from AAA, regular gasoline costs an average of $3.84 per gallon nationally, compared to around $2.98 at the start of the conflict, highlighting the lag between wholesale and consumer pricing adjustments.
From a technical standpoint, crude oil remains under pressure with sellers currently in control. To shift this near-term bias toward buyers, prices need to reclaim key moving averages: first, the 100-hour moving average at $70.13; then, more significant resistance levels at the 200-hour ($71.89) and 200-day ($73.91) moving averages.
In other market news, weaker-than-expected ADP data has led to modest declines in U.S. stock indices: The NASDAQ is down -112 points, the S&P index by -14 points, and the Dow Jones Industrial Average by -56 points.
Source: InvestingLive. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.