“More oil from OPEC+ is the base case,” said Bjarne Schieldrop, a chief commodities analyst at Swedish bank SEB. “Saudi Arabia and Russia have already started to lift production. Unofficial sources have said that Russia will propose to return production back to the October 2016 (level), i.e. removing the cap altogether over a period of three months.”
On Tuesday, the American Petroleum Institute said crude oil inventories rose by 830,000 barrels in the last week to 433.7 million. The OPEC meeting on June 22-23 in Vienna will also weigh in heavily on what oil prices will do in the next few weeks.
“With rising production from U.S. shale adding to oil’s woes and reviving oversupply concerns, further downside could be a possibility in the short to medium term,” said Lukman Otunga, an analyst at futures brokerage FXTM.
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