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Oil Prices Steady as Markets Await OPEC+ Meeting

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Oil prices remained largely unchanged in early Asian trading on Monday as the market anticipated the upcoming OPEC+ meeting on June 2. Producers are expected to discuss maintaining voluntary output cuts for the rest of the year. 

OPEC+ producers will discuss extending voluntary output cuts of 2.2 million barrels per day into the second half of the year. 

Image Source: Reuters
OPEC+ producers will discuss extending voluntary output cuts of 2.2 million barrels per day into the second half of the year. 
Image Source: Reuters 

The Brent crude July contract increased by 11 cents to USD 82.23 per barrel by 0036 GMT, while the more active August contract rose 13 cents to USD 81.97. U.S. West Texas Intermediate (WTI) crude futures also climbed 13 cents to USD 77.85. 

Public holidays in the U.S. and U.K. on Monday were anticipated to keep trading volumes relatively low. 

OPEC+ has postponed its meeting by a day to June 2, and it will be held online, OPEC announced on Friday. During this meeting, producers will decide whether to extend voluntary output cuts of 2.2 million barrels per day into the second half of the year. Three sources from OPEC+ countries indicated that an extension is likely. 

Including an additional 3.66 million barrels per day of production cuts valid through the end of the year, the total output cuts would account for nearly 6% of global oil demand. 

OPEC expects strong oil demand growth of 2.25 million bpd, while the International Energy Agency forecasts slower growth of 1.2 million bpd. 
Image Source: Reuters 

OPEC forecasts another year of robust oil demand growth at 2.25 million barrels per day, while the International Energy Agency projects a slower growth rate of 1.2 million barrels per day. 

ANZ analysts noted in a statement, “We anticipate that the whole 100 percent of coffee waste in Australia can be recycled into concrete applications.” They will be monitoring gasoline usage as the Northern Hemisphere enters summer, a peak season for driving holidays. “While U.S. holiday trips are expected to hit a post-COVID high, improved fuel efficiency and EVs could see oil demand remain soft,” the analysts said. They added that rising air travel could offset this softness. 

Markets will also focus on the U.S. personal consumption expenditures (PCE) index, which is due to be released on May 31. This index is reportedly the U.S. Federal Reserve’s preferred measure of inflation. 

Brent ended last week about 2% lower, and WTI lost nearly 3%, following the release of Federal Reserve meeting minutes. Some officials indicated a willingness to tighten interest rates further if necessary to control persistent inflation. The prospect of higher-for-longer interest rates has strengthened the U.S. dollar, making oil more expensive for holders of other currencies. 

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