FX.co ★ Oil Fluctuates Ahead OPEC Decision

On Tuesday, West Texas Intermediate (WTI) crude oil futures stabilized around $65.7 per barrel, exhibiting fluctuations as investors awaited the forthcoming production decision from OPEC+. The organization is anticipated to increase production quotas by 411,000 barrels per day (bpd) in August, a continuation of the increments observed in May, June, and July. Should this move be confirmed, total production hikes for 2025 would sum up to 1.78 million bpd, exceeding 1.5% of global demand. This planned increase serves as a penalty for overproducing members, while simultaneously acting as a strategic maneuver by Saudi Arabia to reclaim market share lost to U.S. shale and other producers. Additionally, the mitigation of geopolitical tensions, especially the ongoing Israel-Iran ceasefire, has alleviated the risk premium in oil prices. However, investor sentiment remains cautious given the unpredictability surrounding potential new U.S. tariffs. Treasury Secretary Scott Bessent has cautioned that, despite ongoing negotiations, some countries might face heightened tariffs following the July 9 deadline, which has dulled the global economic outlook and exerted downward pressure on oil prices.