Oil markets were little changed in early trade on Wednesday, albeit with an upside bias. Prices picked up as the morning progressed in a move which saw crude test resistance at the top end of its current, tight trading range.
Traders are having to balance expectations for increased production against recent mixed economic signals. OPEC+ is expected to announce yet another monthly output increase of 411,000 barrels per day when it meets this weekend.
Meanwhile, the latest data on US inventories from the American Petroleum Institute (API) noted an unexpected build in crude inventories last week, even as the US driving season proceeds, when typically, a drawdown is expected.
Crude has spent the past week moving sideways and consolidating in a tight price range. Front-month WTI has spent most of this period stuck between $65.50 and $64.00. This follows a period of heightened volatility after Israel launched airstrikes against Iran in mid-June, later to be joined by the US.
Source: TradingView
Market participants are now looking for fresh information which could influence near-term price direction. For now, oil prices remain stable, though market tone suggests that positioning could shift quickly depending on how the trade and geopolitical headlines unfold in the coming sessions.
As with all dollar-denominated commodities, crude should also get some support from the current round of US dollar weakness.
