Oil Prices Climb Amid OPEC+ Meeting and US Travel Surge

Oil prices experienced a modest uptick after last week's decline, as the market focuses on an upcoming OPEC+ meeting and the start of the summer driving season in the US. Brent crude oil remained above $82 per barrel after dropping 2.2% last week, its lowest since early February. Similarly, West Texas Intermediate crude stayed above $78 per barrel. The Organization of the Petroleum Exporting Countries and its allies are expected to meet online and discuss continuing production cuts into the second half of 2024.

Trading was light due to holidays in the UK and the US, where the Memorial Day weekend marks the start of the summer driving season, offering a glimpse into future demand trends. Early signs indicate strong travel activity, with the American Automobile Association predicting the highest number of travelers in nearly 20 years over the holiday weekend.

"Last week, we saw strong demand from the US leading up to the Memorial Day weekend," said Giovanni Staunovo, a commodity strategist at UBS Group AG. "Increased flight activity and high gasoline demand are expected to support oil prices."

Brent crude has risen about 7% this year, supported by ongoing geopolitical tensions and OPEC+’s production cuts of around 2 million barrels per day. However, oil prices have fallen since mid-April as fears of a widespread conflict in the Middle East disrupting oil supplies have diminished.

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