India June economic report: Global crude oil prices expected to remain subdued after larger than anticipated production hike by OPEC

India June economic report: Global crude oil prices expected to remain subdued after larger than anticipated production hike by OPEC

Global crude oil prices are expected to remain subdued following a larger than anticipated production hike by OPEC, according to the latest economic report from India. This development comes amidst ongoing trade talks and geopolitical tensions that have been influencing the market.

The Indian report highlights that crude oil prices on Thursday settled mixed, with September WTI crude oil (CLU25) closing up by 0.78% (+1.20%) and September RBOB gasoline (RBU25) closing down by 0.0127% (-0.61%) [1]. The rally in the S&P 500 to a new record high on Thursday indicated confidence in the economic outlook, which is bullish for energy demand and oil prices. However, the dollar's strength and mixed US economic reports limited gains in crude prices [1].

Signs of progress in US trade deals have been boosting crude prices. On Wednesday, the US and Japan agreed to a trade deal, and Bloomberg reported that the US and European Union were close to a trade deal [1]. These developments have provided a positive outlook for crude oil prices. However, concerns about a global oil glut are negative for crude prices. The Iraqi government has approved a plan for the semi-autonomous Kurdish region to resume oil exports, which could increase global oil supplies and undermine WTI prices [1].

The US and European Union have agreed on a trade deal that sets a blanket 15% tariff on goods traded between them, which is expected to take effect on August 1 [2]. This deal has eased fears that Trump’s tariff policies will impact global economic growth and oil demand. Additionally, the U.S. is considering sanctioning Russian oil to expedite the resolution of the war in Ukraine, which could further influence crude oil prices [2].

The International Energy Agency (IEA) and the US Energy Information Administration (EIA) forecast a surplus of oil next year, with the IEA projecting a surplus of 2 million barrels a day, the largest surplus since the pandemic [2]. This surplus could weigh on WTI prices, as it suggests an oversupply of crude oil in the market.

In conclusion, the Indian economic report indicates that global crude oil prices are expected to remain subdued after the larger than anticipated production hike by OPEC. The mixed economic reports and trade deal agreements are providing a positive outlook for crude oil prices, but concerns about a global oil glut and increased supply from the Kurdish region could weigh on prices. Investors and financial professionals should closely monitor these developments to make informed decisions.

References:
[1] https://www.nasdaq.com/articles/crude-prices-rise-progress-trade-talks-supports-energy-demand
[2] https://economymiddleeast.com/news/crude-oil-prices-rise-to-68-75-as-u-s-japan-trade-deal-boosts-market-optimism/
[3] https://www.fxstreet.com/news/wti-gains-traction-to-near-6500-as-us-eu-confirm-15-tariff-deal-202507280256