Morning Highlights: Oil Steady as OPEC+ Output Decision Looms, Trade War Fears Ease

Market Snapshot (as of 6:30 EST)

🔼 Brent (July): $64.93/b (+$0.19)

🔼 WTI (July): $61.69/b (+$0.16)

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Key Themes Today:

• Oil holds near $65 ahead of key OPEC+ output meeting

• U.S.-EU trade war delay offers short-term price support

• OPEC+ expected to approve July increase of +411,000 bpd

• Shale growth slowing; Non-OPEC supply rises outside U.S.

• Goldman Sachs maintains bearish price outlook through 2026

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Key Drivers:

🔸 OPEC+ Eyes July Output Hike

All eyes are on the OPEC+ decision this weekend, with the group expected to finalize a July production hike of 411,000 barrels per day at a May 28 online ministerial meeting.

UBS's Giovanni Staunovo: “Upside is limited until it is clear what OPEC+ will decide.”

A separate meeting of the eight voluntary cutters is now scheduled for May 31, a day earlier than planned, according to Reuters. The bloc had already committed to accelerated supply increases in June.

Russia’s Alexander Novak added on Monday that no formal discussion has occurred yet, keeping markets cautious.

🔸 U.S. Trade Threat Eased – Temporarily

Oil prices found some modest support after President Trump postponed tariff talks with the European Union until July 9, removing near-term risks of new duties on transatlantic trade.

PVM’s Tamas Varga: "Delaying tariffs against the EU provided support to prices."

The trade truce adds to last week’s 90-day cooling period between the U.S. and China, suggesting some breathing room for global trade and oil demand.

🔸 Iran Unfazed by Nuclear Deal Stalemate

Iranian President Pezeshkian struck a defiant tone on Monday, saying the country could weather continued sanctions if nuclear negotiations with the U.S. fail.

A failed deal would likely preserve sanctions, limiting Iranian supply and lending underlying support to prices, traders noted.

🔸 Goldman Doubles Down on Bearish Outlook

In a new note, Goldman Sachs reaffirmed its 2025 Brent forecast at $60, and $56 for WTI, expecting further declines into 2026. Despite upward demand revisions (now 600,000 bpd for 2025), the bank sees robust supply growth outside of U.S. shale.

• Goldman projects +1 million bpd in non-OPEC, non-shale supply growth in the next two years, driven by projects in Saudi Arabia and Qatar.

• U.S. shale, by contrast, is retrenching as prices remain below breakeven for new wells.

UBS, however, pushed back on the surplus narrative, citing tight visible inventories in Q1.

Kpler’s Amena Bakr on X: UBS expects “revisions in both supply and demand projections” soon.

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What’s Next:

• May 28: OPEC+ ministerial meeting to set July quotas

• May 31: Meeting of eight voluntary cutters

• EIA Weekly Inventory Report (Wednesday)

• Baker Hughes Rig Count (Friday)

• ran-U.S. nuclear negotiations remain ongoing