Oil falls on prospect of more OPEC+ supply, easing risks in Mideast
SINGAPORE: Oil prices fell 1% on Monday as an easing of geopolitical risks in the Middle East and the prospect of another OPEC+ output hike in August boosted the supply outlook.
Brent crude futures fell 66 cents, or 0.97%, to $67.11 a barrel by 0031 GMT, ahead of the August contract's expiry later on Monday.
The more active September contract was at $65.97, down 83 cents.
U.S. West Texas Intermediate crude dropped 94 cents, or 1.43%, to $64.58 a barrel.
Last week, both benchmarks posted their biggest weekly decline since March 2023, but they are set to finish higher in June with a second consecutive monthly gain of more than 5%.
A 12-day war that started with Israel targeting Iran's nuclear facilities on June 13 caused Brent prices to surge above $80 a barrel after the U.S. bombed Iran's nuclear facilities and then slump to $67 after President Donald Trump announced an Iran-Israel ceasefire.
The market has stripped out most of the geopolitical risk premium built into the price following the Iran-Israel ceasefire, IG markets analyst Tony Sycamore said in a note.
Oil steadies after report of planned OPEC+ Aug output hike
Further weighing on the market, four delegates from OPEC+, which includes allies of the Organization of the Petroleum Exporting Countries, said the group was set to boost production by 411,000 barrels per day in August, following similar-size output increases for May, June and July.
OPEC+ is set to meet on July 6 and this would be the fifth monthly increase since the group started unwinding production cuts in April.
In the U.S., the number of operating oil rigs, an indicator of future output, fell by six to 432 last week, the lowest level since October 2021, Baker Hughes said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
2 hours ago
- Business Recorder
Corn eases on supply hopes, soybeans rise ahead of US reports
SINGAPORE: Chicago corn slid on Monday with the market trading close to last week's eight-month low, and wheat lost ground with both products facing pressure from expectations of ample global supplies. Soybeans edged higher in positioning ahead of the US Department of Agriculture acreage, stock and crop progress reports later in the day. 'The supply picture is pretty bearish for grains, and we don't see much upside in prices,' said one trader in Singapore. The most-active corn contract on the Chicago Board of Trade (CBOT) fell 0.2% to $4.10-3/4 a bushel, as of 0337 GMT. Wheat lost 0.3% to $5.39-1/4 a bushel. Soybeans, which hit a three-month low on Friday, added 0.2% to $10.26-3/4 a bushel. Favourable supply prospects in the United States and key exporting countries are likely to pressure prices. Warm weather and rains have created the ideal growing conditions for soybeans and corn in the US Midwest, while farmers in Brazil are expected to harvest a bumper second corn crop, following a record soybean harvest earlier this year. Taiwan's MFIG buys about 65,000 T corn from Brazil, traders say The International Grains Council raised its 2025-26 world wheat crop outlook by 2 million tons to 808 million on Thursday, while the European Commission increased its forecast for the European Union's soft wheat crop by 1.6 million tons to 128.2 million tons. Canadian farmers planted more acres of wheat, oats, soybeans, lentils, dry peas and corn and fewer acres of canola and barley compared with 2024 levels, according to a Statistics Canada survey released on Friday. India's annual monsoon rains covered the entire country on Sunday, nine days earlier than is typical, the weather department said, bringing forward planting of summer-sown crops. Participants in agricultural markets are also adjusting their positions. Large speculators increased their net short position in CBOT corn futures in the week to June 24, regulatory data showed on Friday. Non-commercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and switched to a net short position in soybeans, the Commodity Futures Trading Commission's weekly commitments of traders report showed.
Business Recorder
2 hours ago
- Business Recorder
Deal that reduced US tariffs on UK cars and aircraft parts comes into effect
The trade deal signed between US President Donald Trump and British Prime Minister Keir Starmer lowering some tariffs on imports from Britain has come into effect, the British government said on Monday. British car manufacturers will now be able to export to the US under a reduced 10% tariff quota from an earlier 27.5%, while the current 10% tariffs were fully removed for goods like aircraft engines and aircraft parts, the statement said, reiterating details announced earlier in June. UK PM Starmer calls on Iran to restart nuclear negotiations However, the issue of steel and aluminum tariffs remains unresolved. Britain has avoided tariffs of up to 50% on steel and aluminum that the US imposed on other countries earlier this month, but it could face elevated tariffs starting July 9 unless a deal is reached. ' we will continue go further and make progress towards 0% tariffs on core steel products as agreed,' the British statement added.
Business Recorder
2 hours ago
- Business Recorder
China's yuan rises after midpoint set at highest in nearly 8 months
HONG KONG: China's yuan was firmer against the US dollar on Monday, supported by the central bank's move to raise the daily reference rate to its strongest level in almost eight months. Chinese manufacturing shrank for a third month in June but the figure was within expectations and did not put pressure on the yuan. Prior to the market opening, the People's Bank of China set the midpoint rate at 7.1586 per dollar, its strongest since November 8, 2024 and 95 pips firmer than a Reuters' estimate. The spot yuan is allowed to trade 2% either side of the fixed midpoint each day. The central bank has been gradually allowing some yuan appreciation, investors said. 'The main reason why the central bank has guided the appreciation of the yuan is continued weakness in the US dollar,' Shanghai Chongyang Investment Management said in a note to clients. US President Donald Trump's tariff policies and concerns about their impact on economic growth as well as worries about the indepedence of the Federal Reserve have led to a 10% decline in the dollar index this year. As of 0352 GMT, the yuan was 0.14% higher at 7.1641 to the dollar after trading in a range of 7.1618 to 7.1686. The yuan is up 0.5% against the dollar this month, and 1.9% firmer this year. Shanghai Chongyang also said that the central bank was likely encouraged to allow appreciation after data from the past two months showed that the impact of reciprocal tariffs on Chinese exports has so far been limited. The official purchasing managers' index (PMI) rose to 49.7 in June versus 49.5 in May, below the 50-mark separating growth from contraction, though that was in line with a Reuters forecast. Yuan lower on weak industrial data 'The economic momentum is stable partly due to strong exports… I think monetary policy will stay on hold for now. The policy makers will likely wait and monitor the development of trade war,' said Zhiwei Zhang, chief economist at Pinpoint Asset Management. Offshore yuan traded at 7.163 yuan per dollar, up about 0.15% in Asian trade.
