Oil prices were little changed on Tuesday as investors assess the outlook that OPEC+ will announce a production hike for August at its next meeting, and amid ongoing US trade negotiations with major partners. 

Brent rose 5 cents to $66.79 a barrel as of 09:01 GMT, while US West Texas Intermediate rose 4 cents to $65.15.

Four OPEC+ sources told Reuters last week that the organization plans to raise output by 411 thousand bpd in August, after similar hikes for May, June, and July. 

Such a hike would raise total OPEC+ supplies in 2025 by 1.78 million bpd, almost 1.5% of global oil demand. 

Deal Anticipation 

Investors are also analyzing trade negotiations before US President Trump’s July 9 tariff deadline. 

US Treasury Secretary Scott Bessent that countries have received warnings of high future tariffs despite what he described as “good-intent negotiations”, adding that tariffs could return to between 11% and 50% after the temporary pause ends.

Otherwise, Morgan Stanley expects Brent to retreat to about $60 a barrel by early 2026 as geopolitical tensions recede and supplies surge.

The bank noted that the spike in prices above $80 a barrel during the Israel-Iran 12 day war was highly transient, with prices now falling to $67 a barrel after the ceasefire announcement. 

The bank expects strong oil supply growth from outside OPEC by about a million bpd in 2025 and 2026, enough to cover global demand growth.

The bank also expects a surplus of global supplies by 1.3 million bpd in 2026.

The US dollar fell on Tuesday against a basket of major rivals amid mounting concerns about the US fiscal situation following Trump’s big tax bill, and with uncertainty about the trade agreements. 

Investors are now betting on a faster pace of Fed rate cuts this year, while waiting for crucial US data this week, including the payrolls report on Friday. 

That led to a dollar selloff wave, which hit 10-year lows against the Swiss franc at 0.790, with a 0.64% drop against the yen at 143.08, with the yen closing the first half of the year with a 9% surge, its best performance since 2016.

The euro settled near four-year highs at 1.1781, with the common currency up 13.8% in the first half of the year, marking its best ever half-year performance. 

Sterling rose 0.2% to $1.3757, hovering near 3-⅕ year highs reached last week, while the dollar index hit February 2022 lows ar 96.6. 

Goldman Sachs now expects three Federal Reserve rate cuts this year, compared to previous estimates of just a single rate cut in December, citing the limited impact of tariffs and the softer labor market.

US President Donald Trump’s recent tax bill raised concerns about the financial stability of America, with ongoing uncertainty as well about US trade deals. 

Trump continued to pressure the Federal Reserve to cut interest rates, and sent Fed Chair Powell a list of interest rates by global central banks, saying that US rates should be between the 0.5% Japanese rate and the 1.75% Danish rate.

Investors are also monitoring the developments of US trade negotiations with major partners as the July 9 tariff deadline approaches with little progress so far. 

Gold prices rose in European trade on Monday on track for the second profit in a row, trading above $3300 an ounce and moving away from a five-week low as the dollar weakened. 

Traders await crucial US labor data this week to gather more clues on the future of Fed rate cuts this year.

The Price

Gold prices rose 1.25% today to $3343 an ounce, with a session-low at $3302.

On Monday, gold rose 0.9%, the first profit in three days away from a five-week trough at $3247.

The Dollar

The dollar index fell 0.3% on Tuesday, sharpening losses for the seventh straight session and plumbing a three-year nadir at 96.61 against a basket of major rivals.

US President Donald Trump’s recent tax bill raised concerns about the financial stability of America, with ongoing uncertainty as well about US trade deals. 

Investors are now betting on a faster pace of Fed rate cuts this year, while waiting for crucial US data this week, including the payrolls report on Friday. 

Trump continued to pressure the Federal Reserve to cut interest rates, and sent Fed Chair Powell a list of interest rates by global central banks, saying that US rates should be between the 0.5% Japanese rate and the 1.75% Danish rate.

US Rates

Investors interpreted Fed Chair Jerome Powell’s last week Congressional testimony as leaning cautious, after saying that rate cuts are likely if inflation doesn’t rise this summer in response to tariffs.

According to the Fedwatch tool, the odds of a Fed 0.25% interest rate cut in July stood at 20%.

The odds of such a cut in September stood at a much better 93%.

SPDR

Gold holdings at the SPDR Gold Trust fell 2.29 tons yesterday to a total of 952.53 tons, the lowest since June 20.

The eurozone's consumer prices rose 2.0% y/y in June, matching expectations, and up slightly from 1.9% in the previous reading.

Excluding food and energy prices, inflation rose 2.3% last month as expected, same as the previous reading.