Oil Market Able to Absorb OPEC+ Supply for Now, But Oversupply Looms

Wall Street Journal

4 days ago

1014 GMT – The oil market has so far managed to absorb additional supply from OPEC+ due to low inventories and seasonally higher demand, analysts at Commerzbank Research say. 'Following the sharp price drop at the beginning of April and a further decline at the beginning of May, the price of Brent oil has traded between $63 and $67 per barrel in recent weeks,' analyst Carsten Fritsch says. However, he warns this balance could prove fragile if the cartel and its allies continue to ramp up production at the current pace. That could lead a considerable oversupply to develop in the fall. In midday trade, Brent crude and WTI are both up 0.5% at $65.93 and $63.70 a barrel, respectively. ([e-mail])
0801 GMT – Oil prices are broadly stable in early trade as investors weigh rising OPEC+ output and the threat of wildfires in Canada's energy hub. Brent crude and WTI are flat at $65.63 and $63.37 a barrel, respectively. The benchmarks rose more than 1% in the previous trading session due to supply concerns after the Alberta wildfires shut in more than 300,000 barrels a day of heavy crude production. 'There continue to be clear signs of tightness in the spot oil market,' analysts at ING say. Prices also found support from expectations that U.S. crude inventories fell last week and dimming prospects of an imminent nuclear deal with Iran after President Trump said he won't allow uranium enrichment. Still, gains remain capped by broader concerns over accelerated OPEC+ supply increases and the economic impact of sweeping U.S. tariffs. ([e-mail])