Oil trades sideways ahead of OPEC market outlook

Oil is trading sideways ahead of OPEC’s market outlook and as investors watch developments in the Israel-Hamas war. Brent crude traded above $82 a barrel after closing slightly lower on Monday, while U.S. crude was around $77 after capping its longest streak of daily gains since September. The Organization of the Petroleum Exporting Countries’ monthly report will shed light on global balances as the cartel and its allies curb production. Morgan Stanley recently raised its price targets, citing factors such as OPEC’s better-than-expected compliance with production cuts. Tensions remain high in the Middle East. Israel has launched attacks on Rafah in the Gaza Strip in its war against Hamas, while U.S. President Joe Biden has called for a six-week pause in hostilities. Tehran-backed Houthi rebels in Yemen continue to harass ships and disrupt shipping in the Red Sea. Meanwhile, the European Union has proposed new trade restrictions on about two dozen firms, including three based in China, accused of supporting Russia in its war against Ukraine. The companies are mostly involved in technology and electronics, and the plan involves Western nations taking a stronger line on imposing price caps on Russian crude. Oil has been trading around $10 a barrel this year, with tensions from conflict in the Middle East and OPEC supply cuts offset by ample production from outside the group and uncertain demand outlooks. Top importer China is beset by widespread deflationary pressures, while Goldman Sachs Group highlighted risks to consumption.