Oil Prices Rise as OPEC+ Maintains Demand Outlook and U.S. Crude Inventories Increase Modestly

Oil prices rebounded on Wednesday after two days of losses, as OPEC+ expressed confidence in global demand despite an increase in output, and investors weighed a slight rise in U.S. crude inventories.

Key Highlights:

• Brent Crude: Brent futures for September rose 0.4% to $69.01 per barrel.
• WTI Crude: U.S. West Texas Intermediate (WTI) futures gained 0.6% to $66.94 per barrel.

OPEC+ Outlook and Demand Forecast:

• OPEC+ Maintains Positive Demand Outlook: OPEC+ reaffirmed its oil-demand forecast for 2025 and 2026, despite global trade tensions. The group expressed optimism that economic growth in the second half of the year could surpass expectations, supported by potential trade agreements and easing economic uncertainty.
• Global Economic Growth: OPEC+ anticipates that trade conflicts will ease, which could lead to stronger-than-expected economic growth in the latter part of the year, positively impacting oil demand.

U.S. Tariffs and Economic Concerns:

• U.S. Tariffs Impact on Oil Demand: Concerns over the impact of President Trump’s new tariffs, scheduled to take effect on August 1, have put pressure on oil prices. These tariffs could drive inflation and slow down economic growth, negatively affecting oil demand.
• U.S. President’s Statement on Russia: Despite Trump’s earlier warning about Russia, oil prices had initially fallen nearly 3%. Trump later refrained from immediate action, giving Russia a 50-day window to end the war in Ukraine.

U.S. Crude Inventory Data:

• Modest Rise in U.S. Crude Inventories: The American Petroleum Institute (API) reported a slight increase of 839,000 barrels in U.S. crude oil inventories for the week ending July 11, following a large build-up in stocks the previous week.
  • Gasoline inventories increased by 1.93 million barrels.
  • Distillate stocks rose by 828,000 barrels.
• Refinery Activity: U.S. refinery activity remains elevated to meet seasonal demand for transport fuels, particularly gasoline, jet fuel, and kerosene.

OPEC+ Production Hike:

• OPEC+ Increase: The organization raised output by 548,000 barrels per day (bpd) for August, continuing its trend of increasing production despite broader market concerns.

Oil prices rose as OPEC+ maintained its global demand forecast, while concerns over Trump’s tariffs and geopolitical tensions, especially related to Russia and Ukraine, limited further gains. However, U.S. crude inventories showed modest growth, signaling potential pressure on prices in the near term.