Oil prices little changed as markets await OPEC+ meeting

By Colleen Howe

BEIJING (Reuters) – Oil prices were in a holding pattern at the start of Asian trading on Monday as markets awaited an OPEC+ meeting on June 2 where producers are expected to discuss maintaining voluntary output cuts for the rest of the year.

The July Brent crude contract rose 11 cents to $82.23 a barrel by 00:36 GMT. August’s most active contract, LCOc2, rose 13 cents to $81.97.

West Texas Intermediate (WTI) crude futures rose 13 cents to $77.85.

Holidays in the US and UK on Monday were expected to keep trading relatively light.

The next meeting of the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, has been postponed by a day to June 2 and will be held online, OPEC said on Friday.

Producers will discuss whether to extend voluntary production cuts of 2.2 million barrels per day into the second half of the year, with three sources from OPEC+ countries saying an extension was likely.

Combined with another 3.66 million bpd of production cuts valid until the end of the year, the production cuts are equivalent to almost 6% of global oil demand.

OPEC said it expects another year of relatively strong oil demand growth of 2.25 million bpd, while the International Energy Agency expects much slower growth of 1.2 million bpd.

ANZ analysts said in a note they will be watching gasoline use as the Northern Hemisphere enters summer, traditionally a peak season for driving holidays.

“While US holiday travel is expected to peak post-COVID, improving fuel efficiency and electric vehicles could see oil demand remain weak,” the analysts said. But they added that this could be offset by increased air travel.

Markets will also be watching the US personal consumption expenditures (PCE) index this week for further signals on interest rate policy. The index, which is expected to be released on May 31, is reportedly the US Federal Reserve’s preferred measure of inflation.

Brent ended last week down about 2% and WTI lost almost 3% for the week after Federal Reserve meeting minutes showed that some officials would be willing to tighten interest rates further if they believed it was necessary. control persistent inflation.

The prospect of higher interest rates for longer has strengthened the US dollar, making oil more expensive for holders of other currencies.

(Reporting by Colleen Howe; Editing by Sonali Paul)