In overview, the Brent Crude market witnessed a week of mixed activity, with prices fluctuating between highs of $78/barrel and lows of $74/barrel. West Texas Intermediate (WTI) also experienced a 3.2% increase, reaching $72/barrel.

The Bank of England received a warning about the potential consequences of raising interest rates by an additional 2%, bringing them to 7%, in an effort to curb inflation. Concerns were raised about the impact on the housing market and the possibility of a recession. However, leading economists clarified that the situation is not comparable to the 2007-2008 financial crisis, and there are no indications of an impending crash.

The OPEC+ meeting, held in Vienna, concluded over the weekend with an announcement of continued production tightening measures until August. While non-OPEC+ supply, particularly from Venezuela and Iran, has been increasing slowly, overall, there is progressive growth in Brent Crude prices.

The stability of the British pound (Sterling) has been beneficial for British oil consumers, with a slight increase to 1.28 against the dollar, providing marginal reassurance to British purchasers.

A Look Ahead 

On Monday, Brent Crude opened higher than the previous week at $77.7/barrel following the OPEC+ meeting. This upward trend is often observed after supply restriction announcements from the group of nations. While the April announcement led to a sharp increase, the news for July and August has shown a gradual rise in prices.

The partial increase in supply outputs from Iran and Venezuela may somewhat ease the upward trajectory, but with over 50% of the world’s oil supply coming from OPEC+, their influence is likely to limit the significant impact of these increases in the coming weeks.

Although Brent Crude prices are still below the bank’s forecasts for the year, the current trend suggests a movement towards these anticipated prices. After the Vienna meet the main takeaway is we could be knocking on the door for a major upward price breakout.

In the week ahead, market participants will closely monitor the US crude oil inventory reports, which will play a crucial role. A substantial build-up in inventories may raise concerns about oversupply and exert downward pressure on prices. Conversely, a drawdown in inventories could provide support for prices.