By Giulia Petroni

Here is a look at what happened in oil markets in the week of June 30-July 4 and what the focus will be in the days to come.

OVERVIEW: Following a sharp selloff triggered by the Israel-Iran cease-fire, oil prices have largely traded sideways over the past week. Investors are taking a cautious, wait-and-see approach ahead of the upcoming OPEC+ meeting and President Trump's July 9 tariff deadline. Brent crude, the international oil benchmark, trades around $68 a barrel, while the U.S. oil gauge West Texas Intermediate is at $66 a barrel. The futures contracts are up 2.2% and 1.4%, respectively, on the week.

MACRO: U.S. stocks closed at fresh record highs Thursday as the latest U.S. payroll data beat expectations, bolstering the case for the Federal Reserve to keep interest rates on hold. Concerns about the U.S.'s fiscal deficit are growing after Congress passed Trump's 'big, beautiful' bill, while major U.S. trading partners are racing to reach agreements with the U.S. ahead of the expiration of a 90-day pause on so-called reciprocal tariffs.

GEOPOLITICAL RISKS: Trade tensions are once again in the spotlight, with Trump announcing the U.S. plans to notify many trading partners of unilateral tariff rates of up to 70% by July 9. However markets don't expect current negotiations to be fully concluded by that deadline, with many anticipating extensions.

Meanwhile, Iran's Foreign Minister Abbas Araghchi said in a post on X that the country remains committed to the Nuclear Non-Proliferation Treaty and its safeguards agreement, shortly after halting collaboration with the United Nations nuclear watchdog. Investors are now closely monitoring developments in U.S.-Iran talks, which Axios reported could occur as soon as next week.

SUPPLY AND DEMAND: A sharp drop in the geopolitical risk premium has brought market fundamentals back into focus. "Supply is increasing rapidly and, in all likelihood, will continue to do so," said Kieran Tompkins, economist at Capital Economics.

OPEC+ is expected to approve another super-sized production increase, a move that would put the group on track to unwind its voluntary cuts by the start of the fourth quarter, tipping the market into a surplus.

U.S. crude oil inventories rose for the first time in six weeks as imports rose and exports dropped, according to data released by the U.S. Energy Information Administration. Gasoline inventories rose by 4.2 million barrels, while distillate fuel stocks fell by 1.7 million barrels.

WHAT'S AHEAD: Key OPEC+ members are set to meet virtually this weekend to discuss production levels for August, though expectations for a fourth supply increase of 411,000 barrels a day have already been priced in.

Next week is shaping to be eventful, with traders closely monitoring developments in nuclear talks between Iran and Washington and global trade negotiations. At a macro level, focus will be on CPI data due on Tuesday and PPI figures on Wednesday.

Meanwhile, the Energy Information Administration and the International Energy Agency are scheduled to release their monthly reports, with OPEC following in the week after. "The new forecasts are likely to refocus attention on the threat of significant oversupply in the coming months," said Barbara Lambrecht at Commerzbank Research. "It will be interesting to see if the recent sharp decline in U.S. drilling activity leads the EIA to revise its U.S. production forecast downward."

Write to Giulia Petroni at giulia.petroni@wsj.com

(END) Dow Jones Newswires

July 04, 2025 12:04 ET (16:04 GMT)

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