WASHINGTON (dpa-AFX) - Crude oil prices increased on Tuesday, ignoring oversupply concerns due to the OPEC+ decision amid a simmering Red Sea conflict.
WTI Crude Oil contract for August delivery closed up by $0.40 at $68.33 per barrel today.
September month Brent Crude contract was last seen trading, up by $0.77, to $70.35 per barrel today.
At their July 6 meeting, the OPEC+ producers surprised the market by announcing a larger-than-expected production hike of 548,000 bpd for August, exceeding market expectations of 411,000 bpd hike. This move has put the OPEC+ alliance on track to unwind all the 2.2 million bpd cuts ahead by a year.
However, so far oil prices shrugged off a real oversupply threat.
The cartel is reportedly planning another super-sized increase in production of 550,000 bpd for September. This speed-up in unwinding indicated that OPEC+ is heading to claim more market share.
Saudi Arabia raised the August price for its Arab Light Crude to a four-month high for Asia indicating a confidence in demand.
The Middle East conflict between Israel and Iran came to an end after the US President Donald Trump announced a ceasefire on June 24. Both sides have not taken any regressive measure to violate the truce.
The Iranian president had stated that differences with the US can be resolved through a dialogue process.
However, disruption to the oil and energy supply-and-transit now stems from Houthi attacks.
On Sunday, the Iran-aligned militia attacked and sank a bulk carrier Magic Seas off Southwest Yemen in the Red Sea.
Today, the militants attacked another bulk carrier Eternity C in the Red Sea.
Oil and energy traders are worried about a long-term sea traffic disruption as further attacks could draw in US and western forces against the Houthis.
On the trade front, with the July 9 tariff deadline imposed by Trump delayed until August 1, countries are hustling to close a deal with the US.
Analysts feel that oil prices will stabilize once the final levies are revealed in the coming weeks.
A stable and streamlined tariff regime will help accelerate the global economy and increase oil and energy demand.
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