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Oil Returns to Fundamentals as Geopolitical Risk Premium Evaporates

The U.S.-brokered IsraelIran ceasefire erased mid-June price spikes; markets now hinge on fresh OPEC+ output plans against a backdrop of persistent global oversupply.

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Overview

  • OPEC+ delegates confirmed a 411,000 barrels per day production increase for June and July and signaled the same boost for August.
  • Brent crude steadied at $67–68 per barrel and U.S. WTI near $65–66 after a 12% weekly drop eroded war-driven gains.
  • Goldman Sachs reports that options traders now see only a 4% chance of major Middle East supply disruptions over the next three months.
  • Macquarie and U.S. Energy Information Administration data indicate a roughly 2.1 million barrels per day global oil surplus despite record U.S. gasoline demand and inventory draws.
  • A weaker dollar and a rally in U.S. equities have provided limited price support, leaving markets focused on supply signals over geopolitics.