Crude oil futures traded lower on Tuesday morning as markets anticipated that OPEC+ (Organisation of the Petroleum Exporting Countries and allies) would increase production in August.
At 9.53 am on Tuesday, September Brent oil futures were at $66.43, down by 0.46 per cent, and August crude oil futures on WTI (West Texas Intermediate) were at $64.79, down by 0.49 per cent. July crude oil futures were trading at ₹5,554 on Multi Commodity Exchange (MCX) during the initial hour of trading on Tuesday against the previous close of ₹5,581, down by 0.48 per cent, and August futures were trading at ₹5,469 against the previous close of ₹5,492, down by 0.42 per cent.
A recent Reuters report said that OPEC+ was set to boost production by 4,11,000 barrels a day in August, following similar-size output increases for May, June and July.
In their Commodities Feed for Tuesday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said oil prices edged marginally lower on Monday, a move that continued in early morning trading on Tuesday, as the market increasingly turns its attention towards the OPEC+ meeting this weekend. The group is expected to agree to another large supply increase of 4,11,000 barrels a day, taking total supply increases since April to almost 1.8 million barrels a day.
“Given its strategy shift, we believe the group will continue with these large increases. This would see the full 2.2 million barrels a day of supply brought back online by the end of the third quarter, 12 months ahead of the original schedule,” they said.
These larger supply increases should leave the global oil market well supplied for the remainder of the year. It’s set to return to a large surplus in the fourth quarter of this year. Clearly, recent price action suggests the market is mostly focused on this supply, they said.
The geopolitical risk premium has eroded fairly quickly following the ceasefire between Israel and Iran. Expectations for a comfortable oil balance, along with a large amount of OPEC spare production capacity, appear to be comforting the market, they added.
Meanwhile, matters related to US trade tariffs continued to impact crude oil market.
In a post on the social media platform Truth Social, US President Donald Trump criticised Japan for not importing rice from the US. “To show people how spoiled countries have become with respect to the United States of America, and I have great respect for Japan, they won’t take our RICE, and yet they have a massive rice shortage. In other words, we’ll just be sending them a letter, and we love having them as a Trading Partner for many years to come,” he said.
Despite ongoing trade negotiations with different countries, US Treasury Secretary Scott Bessent warned that countries could be notified of sharply higher tariffs. US administration has set July 9 as the deadline for finalising trade agreements.
Markets fear that an increase in trade disruptions could impact the economic growth across various economies. This could impact the demand for commodities such as crude oil.
July zinc futures were trading at ₹256.65 on MCX during the initial hour of trading on Tuesday against the previous close of ₹258.35, down by 0.66 per cent.
On the National Commodities and Derivatives Exchange (NCDEX), July guargum contracts were trading at ₹9,784 in the initial hour of trading on Tuesday against the previous close of ₹9,756, up by 0.29 per cent.
July jeera futures were trading at ₹20,000 on NCDEX in the initial hour of trading on Tuesday against the previous close of ₹20115, down by 0.57 per cent.
Published on July 1, 2025