If oil prices hold above $60 per barrel, the Organization of the Petroleum Exporting Countries (OPEC) is expected to move to also accelerate the phase out of the remaining voluntary production cuts, which will further limit the upside in prices for the foreseeable future, according to a Thursday report by ANZ Research.

OPEC+, the OPEC as well as other oil-producing countries, approved another 411,000 barrels per day increase in output for July. This will bring the increase in supply to 1.4 million barrels per day in the first four months of the phase-out plan, or 64% of the 2.2 million barrels per day in voluntary production cuts.

If the organization shifts permanently to a market-driven strategy, it would push the oil market into a sizeable surplus in the second half and almost surely lead to lower oil prices. If Saudi Arabia chooses to revert to a smaller monthly increase, that may alleviate the downward pressure on oil prices.

With increasing risks of supply disruptions due to tariffs on Canadian oil and tighter sanctions on Iran and Venezuela, the analysts expect an upside for the oil prices near $75 per barrel in the short term. However, looser balances in the second half of the year should see Brent crude push back towards $70 per barrel by the end of 2025.

September will mark the end of the peak demand period, and any production increase by OPEC+ after then would be much harder to absorb. The OPEC and non-OPEC ministerial meeting is due to be held on Nov. 30.

If prices prove resilient despite the recent acceleration in OPEC's output, a broader recalibration of the group's production ceiling might come sooner than anticipated. This will limit the upside in prices for the foreseeable future.

Low oil prices and a shift in focus from "growth at all costs" to a focus on profitability have seen US shale oil companies pull back expansion plans. Their drilling activity has been declining for some time, and it is estimated that the number of active rigs in the US is below what's required to maintain current production. If recent productivity gains are not maintained, US shale oil output is likely to decline.

The analysts suspect OPEC+ will continue its aggressive phase out of production cuts, taking advantage of a lack of growth from non-OPEC suppliers to increase its market share. This

will put it in a stronger position to manage shifts in demand or supply and remove the issue of compliance.

China's export restrictions on rare earth metals are threatening to disrupt the global supply of key materials used in high-tech manufacturing. European and US automakers raised concerns about shortages of components containing these materials, with some already forced to idle factories.

This could have wider implications for metals markets. The auto industry is a key consumer of metals such as copper. Any disruption could lead to weaker demand. Year-to-date gains for the base metals sector narrowed from 12% to 6%, with prices falling sharply for aluminum and copper.

Central bank purchases and strategic fund flows into gold are expected to lift prices towards $3,200 per ounce over the next six months.