WASHINGTON (dpa-AFX) - Crude oil prices edged higher on Monday, dismissing oversupply concerns triggered by July 6 OPEC+ meeting.
WTI Crude oil contract for August delivery closed, up by $0.93 to settle at $67.93 per barrel today.
September month Brent Crude was last seen trading, up by 0.84, to $69.14.
Citing 'steady global economic outlook and healthy market fundamentals', the Organization of Petroleum Exporting Countries and their allies, (OPEC+) agreed on July 6 to increase production by 548,000 barrels per day in August. This is more than the 411,000 bpd hike they committed for May, June, and July.
The alliance is now on track to fully unwind 2.2 million bpd cuts, nearly a year ahead of their schedule.
According to Reuters, the group is likely to approve an increase of 5,50,000 bpd for September when they meet again on August 3.
Saudi Arabia has increased its prices for main crude grade for buyers in Asia.
Traders state that contrary to OPEC+ analysis, the demand in China - the world's top oil importer - has been sluggish and the summer travel season demand for gasoline in the US has also been lesser-than-expected.
When prices rise, importers such as China and India, utilize their stockpiles and prune their imports.
As higher tariffs could slow down the global economic activity and lessen demand for oil and energy, oil traders are more concerned about the macroeconomic consequences of US tariffs in the coming days rather than the OPEC+ output increase.
Today, the US President Donald Trump stated that he plans to tax BRICS (Brazil, Russia, India, China, and South Africa) nations and their allies an additional 10%. China has almost a deal done with the US and India is on the verge of closing one. It is unclear how this new tariff threat will impede US trade relations with these countries.
With the July 9 deadline set by Trump coming to end in two days, countries are rushing to finalize a trade agreement with the US.
In the backdrop of Trump's big spending and tax law adding $3.3 trillion to the US debt, investors are awaiting to see the developments post July 9.
On Sunday, Yemen's Houthi rebels attacked and sunk a bulk carrier, Magic Seas, sailing through the Red Sea. In response Israel had struck Houthi-held ports. Except for this, by and large, the Middle East situation is dormant with the June 24 ceasefire announcement between Israel and Iran still holding good.
Oil and energy supply-and-transit disruption fears stand abated for now.
As the expected US Fed's interest rate cut shall no longer happen sooner because of last week's decent US jobs data, US Dollar price could be dictated by the progress in trade talks after July 9.
Being a dollar-denominated commodity, crude oil price could swerve the way, the US dollar traces its journey.
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