Oil Dips On OPEC Concerns, As China Data Is Also Reassessed

Meanwhile, an analyst paints a grim picture of oil prices for the rest of 2025: File Image/Pixabay

Oil prices dipped on Thursday as analysts weighed the implications of the U.S. tariffs set to be imposed only July 9, as well as the likelihood of the Organization of the Petroleum Exporting Countries (OPEC) agreeing to a fourth monthly major supply increase when it meets on Sunday to discuss the matter.

As of 1217 GMT (and in advance of the U.S. Independence Day holiday), Brent fell 21 cents to $68.90 per barrel, and West Texas Intermediate declined 75 cents to $67.30 per barrel.

OPEC member countries produced an estimated 28.7 million barrels per day (bpd) of crude in 2022, which was 38 percent of total world oil production that year; it is widely expected that OPEC will agree to raise output by 411,000 bpd this weekend.

Also influencing Thursday’s trading was China: earlier this week, it was reported that the country’s factory activity returned to expansion mode last month, with the Caixin/S&P Global manufacturing PMI rising in June from 48.3 in May.

However, analysts were swayed by a different take of the data: that the private-sector survey showed service activity in China expanding in June at its slowest pace in nine months, as demand weakened and new export orders declined.

Accompanying Thursday’s bearish sentiment were forecasts of where oil is headed next; Rob Thummel, senior portfolio manager of Tortoise Capital, thought prices should be in the $70 range but have been impacted by a global oversupply of the commodity.

He said, “In order for oil prices to return to what we think is the $70s, kind of normal price, you need the market to really rebalance…..what that means is either oil production in other locations is going to fall, and, or effectively, demand for oil is probably going to rise more than what people expect in the second half of the year.”

Thummel went on to state with regards to Israel and Iran, “We don’t expect any disruptions in the Middle East because of the conflict, and so as a result of that, we continue to expect the oil market to be oversupplied in 2025 and we will then expect to see oil prices right around the $65 range where they are currently, for the rest of the year.”