Morning Highlights: Oil Steady But Set for 2nd Weekly Loss Ahead of OPEC+ Meeting

Market Snapshot (as of 6:45EST)

🔼 Brent (August): $63.77/b (+$0.42)

🔼 WTI (July): $61.42/b (+$0.48)

Weekly Trend: Both contracts on track to decline ~0.5%

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Themes Today:

• OPEC+ set for third straight monthly output hike

• U.S. tariffs reinstated after court ruling, keeping legal uncertainty alive

• Iran may pause uranium enrichment if U.S. releases frozen funds

• Global oil surplus now at 2.2 million bpd, pressuring prices

• Crude down ~10% since Trump’s April 2 tariff announcement

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Key Drivers:

🔸 All Eyes on OPEC+

The OPEC+ Group of 8 meets Saturday, and consensus is growing around another 411,000 bpd production increase for July, in line with May and June hikes. Some analysts even suggest a larger bump is possible.

Westpac’s Robert Rennie: “The stage is set for another bumper production increase.”

Commerzbank: “The actual announcement is likely to have only a limited effect—already priced in.”

According to JPMorgan, the global supply surplus has widened to 2.2 million bpd, requiring a price reset to balance markets.

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🔸 Trump Tariffs Temporarily Reinstated

Oil dipped on Thursday after a U.S. appeals court reinstated Trump's tariffs, pausing a lower court’s earlier ruling that had blocked them. The legal tug-of-war continues, with a full hearing expected by June 9.

Reuters: “The administration remains determined to implement tariffs, one way or another.”

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🔸 Iran Offers Nuclear Pause

Reuters reports that Tehran may pause uranium enrichment for 12 months if the U.S. releases frozen Iranian funds and acknowledges its right to civilian nuclear power.

While no deal is in sight yet, such a move could pave the way to sanctions relief and additional Iranian barrels returning to market—a bearish factor for crude prices.

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🔸 Kazakhstan, Others May Drive Output Higher

Despite OPEC+ output coordination, Kazakhstan has signaled it will not limit production, contributing further to global oversupply. Analysts expect that not all OPEC+ members can meet higher quotas, but those who can—like Kazakhstan—will keep pumping.

ING: “We expect similar increases through Q3 as OPEC+ defends market share.”