Petroleum futures remain in positive territory Monday, but contracts are backing away from the highs that were seen at mid-morning.

The market has essentially shrugged off a larger than anticipated production increase from the OPEC group and allied nations announced over the weekend. For August, OPEC+ announced a 550,000 b/d increase in oil production quotas. While that may seem bearish, Saudi Arabia announced $1/bbl increases in its official price for crude, an indication that demand is strong and should be able to absorb the excess barrels.

Additionally, OPEC+ is increasing quotas. But, based on production estimates, several members have fallen short of their increased quotas. Domestically, the falling rig count in the United States is seen as supportive of the market.

August West Texas Intermediate crude made a run at the $68/bbl level this morning and Brent crude is once again knocking on the door of $70/bbl. WTI has not topped the $68/bbl level since the market collapsed after the United States' attacks on Iran and has been digging out of a hole since bottoming at $64/bbl. At 11:45 a.m. ET, front-month WTI is up 51cts at $67.51/bbl.

The September Brent contract on Friday settled down 50cts, but is recovering that decline and then some. The contract was last trading at $69.08/bbl, a 78cts increase. It has been about two weeks since the Brent contract eclipsed $70/bbl.

Even though oil is trading higher, refined products are still outperforming crude, with both ULSD and RBOB up more than 2cts/gal heading into midday.

August RBOB is trading close to its highs of the day, but ULSD has backed off more than 4cts since peaking at $2.4356/gal.

For the moment, August RBOB is turning in a slightly better performance. The contract is up 10.22cts at $2.1419/gal and only about 0.25ct off earlier highs.

This is the highest print for RBOB since June 24. Spot markets are mostly following gasoline higher, with wider discounts in the Group 3 market leading to a bit of a lag in upside at midday. August ULSD is trading at $2.3912/gal, a gain of 2.14cts. At its peak, front-month ULSD was up just over 6.5cts, but some profit taking has scaled back diesel gains.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

Reporting by Denton Cinquegrana, dcinquegrana@opisnet.com; editing by Steve Cronin, scronin@opisnet.com

(END) Dow Jones Newswires

July 07, 2025 12:08 ET (16:08 GMT)

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