Oil price stability
Oil prices witnessed remarkable stability during today's trading on Thursday, as WTI futures contracts retreated from their previous gains to trade around the level of 64.8 dollars per barrel, in an indication of the markets turning towards a stage of relative equilibrium after the volatility of the past days.
Current stability factors
Ceasefire between Iran and Israel:
The agreement announced by US President Donald Trump still stands, easing geopolitical concerns that were threatening to close the Strait of Hormuz or disrupt the oil infrastructure in the region.
However, Trump stressed that the United States will continue to put pressure on Iranian oil exports, announcing talks with Tehran next week.
Global supply glut:
OPEC has raised its production in recent months, as the group agreed to an additional increase of 411 thousand barrels per day for July, as part of its plan to gradually restore production levels after a two-year reduction.
US shale oil producers have also maintained record production levels, boosting global supply.
Decline in US stocks:
The latest data from the Energy Information Administration (EIA) showed a significant decline in US crude oil inventories of 5.8 million barrels, far exceeding expectations, indicating strong domestic demand, but it was not enough to push prices up sharply given the abundance of global supplies.
The market's attention is directed to the upcoming OPEC meeting
The focus of traders is now turning to the OPEC meeting scheduled for July 6, at which the group is expected to set production policy for the coming month.
Speculation suggests that the alliance may consider an additional increase in production, especially as concerns persist about the slowdown in global economic growth and its impact on demand.
Future forecasts
Despite the current stability, prices are still subject to fluctuations due to:
- Geopolitical developments, especially with the resumption of US-Iran talks.
- OPEC policies, and whether it will continue to increase production or adopt a more cautious approach.
- Global demand levels, especially with slowing growth in some major economies.
