Oil prices little changed as markets look to OPEC+ meeting.

Oil prices little changed as markets look to OPEC+ meeting.
Oil prices little changed as markets look to OPEC+ meeting.

Oil prices remained steady in early Asian trade on Monday, as markets await the June 2 OPEC+ meeting, at which producers are expected to discuss maintaining voluntary production cuts for the rest of the year .

The July Brent oil contract was up 11 cents at $82.23 a barrel by 0036 GMT. The more active August contract LCOc2 rose 13 cents to $81.97.

U.S. West Texas Intermediate (WTI) crude futures rose 13 cents to $77.85.

Public holidays in the United States and the United Kingdom on Monday are expected to keep trading relatively light.

The next meeting of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, has been pushed back a day to June 2 and will be held online, OPEC said Friday.

Producers will discuss whether to extend voluntary production cuts of 2.2 million barrels per day into the second half of the year, with three sources from OPEC+ countries saying an extension was likely.

Combined with other production cuts of 3.66 million barrels per day valid until the end of the year, the production cuts are equivalent to almost 6% of global oil demand.

OPEC said it expected another year of relatively strong growth in oil demand, to the tune of 2.25 million bpd, while the International Energy Agency forecast much more growth. slow, to the tune of 1.2 million bpd.

ANZ analysts said in a note they would monitor petrol usage as the northern hemisphere enters summer, a traditionally good time for driving holidays.

“While U.S. holiday travel is expected to reach a post-COVID peak, improving energy efficiency and electric vehicles could cause oil demand to remain weak,” the analysts said. But they added that this could be offset by increased air travel.

Markets will also be watching the U.S. Consumer Spending (PCE) index this week, looking for new signals on interest rate policy. The index, due to be released on May 31, is apparently the US Federal Reserve’s preferred measure of inflation.

Brent finished last week down about 2% and WTI lost nearly 3% after Federal Reserve meeting minutes showed some officials would be willing to tighten interest rates further if they felt it was necessary to control persistent inflation.

The prospect of higher interest rates for a long time has strengthened the U.S. dollar, making oil more expensive for holders of other currencies.

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