Global Trade Policy Developments
Recently, global trade policy has been a focal point as stocks in Asia experienced a decline. Equity-index futures also saw a decrease. US President Donald Trump announced that his administration will soon be sending out letters to trading partners to establish unilateral tariff rates before the July 9 deadline. He mentioned that countries will be required to start paying the new levies starting in August.
Volatility in the Oil Market
Crude oil prices have been fluctuating in recent weeks due to concerns about the impact of the Israel-Iran conflict on the oil supply. Brent crude soared above $81 a barrel last month. While the markets have stabilized since then, there are still worries about possible negotiations with Iran, ongoing US-led trade discussions, and evolving policies by OPEC+.
Charu Chanana, the chief investment strategist at Saxo Markets Ltd, stated, “Any surprises from OPEC+ could cause temporary price fluctuations, but the overall situation of challenging macro conditions and uncertainties related to trade demand could limit the price increase. Signals of weakening demand and increasing supply are creating a bearish outlook.”
Updates on OPEC+ Output
Discussions have been underway to move the virtual session of the Organization of the Petroleum Exporting Countries and its allies from Sunday to Saturday, according to several delegates. The group aims to increase output until its market share reaches 28% to 30%. Analysts predict a potential surplus of up to 600,000 barrels per day in this quarter.
Developments in Iran
In regards to Iran, the US is planning to resume nuclear talks, with US Middle East envoy Steven Witkoff scheduled to meet Iranian Foreign Minister Abbas Araghchi in Oslo next week. At the same time, the US has imposed new restrictions on the trade of Iranian oil to maintain pressure on Tehran.
Impact on Oil Production in Canada
A wildfire has emerged near the Fort McMurray area in Canada, approximately 20 kilometers away from a major oil-sands production site. Oil production in Alberta dropped to a two-year low in May. This, combined with reduced output from Mexico and a ban on Venezuelan oil flows, has strengthened heavy crude prices.
Current Market Situation
Due to the US holiday, trading in oil markets is thinner on Friday, with lower than usual volumes being traded during the Asian session.
