Crude oil near $108/bbl after OPEC+ agrees to modest output hike; gold slips 0.6%

Crude oil prices in the global markets were trading near the $108 per barrel (bbl) level during the early market session on Monday, May 4, after the Organisation of the Petroleum Exporting Countries (OPEC+) agreed to raise oil output targets for June 2026.

Apart from the OPEC+ oil output decision, investors' sentiment on Monday’s market was also fuelled by US President Donald Trump’s move to launch ‘Project Freedom’ and escort ships out of the Strait of Hormuz.

As of 7:27 am (IST), the Brent crude oil prices for the July futures were trading 0.07% lower at $108.08 per bbl on Monday, compared to $108.17 per bbl at the previous market close, according to Investing.com data.

Brent crude oil prices for the June futures closed at $114 per bbl last week on April 30, according to the data collected from Barchart.

The US-based West Texas Intermediate (WTI) were trading 0.29% lower at $101.64 per bbl as of 7:30 am (IST) on May 4, compared to $101.94 at the previous commodity market close, according to the exchange data.

Factors affecting oil prices today

The Organisation of the Petroleum Exporting Countries (OPEC+), in an official statement on May 3, announced that the member nations will raise their output targets for June 2026, following the United Arab Emirates' (UAE) exit.

According to the official statement, seven OPEC+ countries have agreed to increase their oil output targets by about 1,88,000 barrels per day next month as they continue to closely monitor and assess market conditions to support stability.

The coalition of oil-exporting countries also said that the UAE’s exit is expected to weaken the oil cartel at a time when the Gulf countries have taken a significant hit to their exports due to the closure of the Strait of Hormuz.

In a social media post on Truth Social, President Donald Trump announced his plans to launch ‘Project Freedom’ from Monday morning to safely escort cargo ships out of the restricted waters of the Strait of Hormuz.

“We have told these Countries that we will guide their Ships safely out of these restricted Waterways, so that they can freely and ably get on with their business,” said Trump in his post.

Trump also reiterated that he remains positive about the ongoing negotiations between the United States and Iran for a potential peace deal amid the West Asia conflict.

Latest reports from Al Jazeera, citing Ebrahim Azizi, the head of National Security Committee of the Iranian Parliament, suggest that any US involvement in the Strait of Hormuz will allegedly be considered a violation of the ceasefire.

Investors remained cautious in the global markets with a focus on the developing geopolitical situation in West Asia. Any potential peace deal between the two countries can likely lead to cooling oil prices in the market due to the easing sentiment among investors.

Gold prices today

The New York Mercantile Exchange-based COMEX gold prices were trading 0.6% lower at $4,616 per ounce as of 10:15 pm on May 3, compared to $4,644.50 per ounce at the previous market close, as per the official data.

Gold prices were trading lower on Monday’s market, Indian time, on the backdrop of higher US dollar prices in the global market. The Bloomberg US dollar spot index (DYX) data suggests that the greenback was trading 0.03% higher at 98.185 as of 10:19 pm (ET) on May 3.

Traders purchase less of commodities like gold if the dollar rate in the market is higher, as they will be able to buy less quantity at the same price, which further pressures down the demand for the precious yellow metal amid the volatile geopolitical environment.