Despite early declines due to inflation concerns, oil prices rebounded by late Monday morning as markets awaited OPEC‘s monthly report. The U.S. benchmark, West Texas Intermediate (WTI), climbed 0.61% to $78.74 per barrel, while Brent crude increased by 0.34% to $83.07 per barrel.
OPEC is set to release its Monthly Oil Market Report (MOMR) on Tuesday, which will provide an outlook for the upcoming period. Last month, OPEC projected strong global oil demand for the summer, driven by increased transportation fuel consumption and holiday travel. The cartel maintained its oil demand growth forecasts at 2.2 million barrels per day for this year and 1.8 million barrels per day for next year.
Analysts expect continued optimism in OPEC’s forthcoming report. If OPEC+ maintains its current voluntary production cuts through July, robust oil demand is anticipated to support the market in the second and third quarters.
Additionally, U.S. inflation data, also set to be released on Tuesday, had initially pressured oil prices downward. The Federal Reserve Bank of New York’s latest survey revealed that Americans are bracing for higher inflation in the coming months and years. Policymakers suggest Europe might cut interest rates before the U.S.
Geopolitical tensions, particularly the ongoing Israel-Hamas conflict, continue to influence oil prices amid concerns that an escalation in the Middle East could disrupt supply.