U.S. Crude Oil Rises as Market Awaits OPEC+ Production Decisions

As the market anticipates the upcoming OPEC+ virtual meeting on Sunday to review production policy, U.S. crude oil prices have climbed more than 1%. OPEC+ members are currently withholding 2.2 million barrels per day from the market to support prices. 

Analysts suggest that OPEC+ is unlikely to increase production since Brent crude prices are nearer to $80 per barrel rather than $90.

Tuesday's energy prices show West Texas Intermediate's July contract at $78.84 per barrel, up $1.12 or 1.44%, marking a 10% gain year to date for U.S. crude oil. Brent's July contract is priced at $83.19 per barrel, up 9 cents or 0.11%, with an 8% gain year to date.

Commodity specialists at Deutsche Bank have maintained their Brent forecast at $83 per barrel for the second quarter and $88 for the latter half of the year, based on the assumption that OPEC+ will keep its current production policy. However, pressure is expected to build on the group to raise output after the June meeting, potentially pushing Brent prices below $80 per barrel.

Saudi Arabia acknowledges that sustaining oil prices significantly above the U.S. oil sector's breakeven price of $75 per barrel is unsustainable in the long run. According to analysts, the stabilization of U.S. oil production since September has provided OPEC with some flexibility in its production strategy. This complex interplay of production decisions and market responses will continue to influence oil prices and industry dynamics in the coming months.