Crude oil futures were higher in mid-morning trade in Asia Tuesday on prospects of tightening supplies by OPEC, but ongoing trade disputes between the US and China could cap prices, analysts said. At 10:29 am Singapore time (0229 GMT), ICE Brent August futures rose 15 cents/b (0.24%) from Monday’s settle at $62.44/b, while the NYMEX July light sweet crude futures contract was up 26 cents/b (0.49%) at $53.52/b.
“Oil prices started the weak on a strong footing [Tuesday] after Saudi energy minister Al-Falih noted that there’s an almost unanimous agreement in OPEC to extend production cuts and that Russia could agree before the current deal expires at the end of the month,” said Edward Moya, senior market analyst at OANDA. “Russia remains key for the production side of the argument, but right now it appears, concerns of global growth will trump any tightening of supplies,” Moya added.
Market participants also attributed the recent cooling of US-Mexico tensions, which saw the US announcing “indefinite suspension” to a 5% tariff on all Mexico imports, also helped bolster sentiment. However, ongoing trade disputes between the US and China capped further gains, an analyst said.