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Oil prices remain unchanged as OPEC+ increases weigh on the market

The price of oil futures was little changed on Tuesday as the markets considered the expectations for more supply next month from major producers, a weaker U.S. Dollar and a mix bag of economic indicators and market indicators coming from the U.S.

Brent crude rose 2 cents to $67.13 a bar at 0345 GMT while U.S. West Texas Intermediate Crude fell 1 cent, down to $65.44 a bar.

Brent oil has fluctuated between a high and a low of $69.05 per barrel since June 25. This is because concerns about supply disruptions have diminished following the ceasefire agreement between Iran and Israel.

Sources said that American Petroleum Institute data released late Tuesday showed U.S. crude inventories had increased by 680,000 barrels over the past seven days, at a period when stocks are typically low during the summer season.

"Today's oil prices are influenced by a combination of factors, including a potentially increasing OPEC+ production, unclear U.S. stock signals, an uncertain geopolitical scenario, and macro policy ambiguity," stated Phillip Nova Senior Market Analyst Priyanka Sahdeva.

Investors have already factored in the planned increases by the Organization of the Petroleum Exporting Countries (OPEC+), which includes Russia. They are not likely to be caught off guard again soon, said Ms. Sher.

Four OPEC+ source told us last week that the group will increase output by 411,000 barrels a day when it meets next month on July 6. This is a similar amount as what was agreed upon for May, June and even July.

According to Kpler data, the market has already seen the effects of previous OPEC+ increases. Saudi Arabia, which is the largest oil exporter in the world, increased its shipments by 450,000 bpd in June from May. This was the highest level in over a year.

Sachdeva said that, "With geopolitics at a minimum for the moment, oil futures are likely to trade in a tighter band this week as global economic worries persist. An easing dollar is the only exception which could extend any upward momentum."

The greenback

The number of people who are unemployed has fallen to its lowest level in three and a half years

A weaker dollar could support prices, as it would encourage buyers to pay in other currencies.

Tony Sycamore is an analyst at IG. He said that the Federal Reserve's interest rate reductions in the second half will be influenced by the non-farm payroll data released on Thursday.

Lower interest rates would spur economic activity, which in turn would boost oil demand.

The Energy Information Administration will release official data on the U.S. stockpile of oil by Wednesday morning at 10:30 am ET. ET. (Reporting and editing by Christian Schmollinger; Trixie Yap, Singapore; Sudarshan Varadahan in Singapore)

(source: Reuters)