Crude oil futures slide on mixed OPEC+ signals

Singapore — 0155 GMT: Crude oil futures traded lower in mid-morning trade in Asia Thursday as mixed supply-side signals from OPEC+ emerged.

At 09:55 am Singapore time (0135 GMT), ICE Brent July crude futures fell 34 cents/b (0.98%) from Wednesday's settle at $34.40/b, while the NYMEX July light sweet crude contract was 69 cents/b (2.10%) lower at $32.12/b.

Uncertainty revolved around Russia's recent comments on easing supply cuts in July, with focus turned towards the next OPEC+ meeting on June 8-10.

"The market had been buoyed by Russia's quick adherence to agreed quotas under the OPEC+ alliance, with the oil producer saying it had reduced output by 2 million b/d," ANZ analysts said in a note Thursday.

"However, yesterday it emerged that it was determined to ease back on output cuts in July. Even though this complies with the supply agreement, it disappointed the market," the analysts added.

Reports emerged Wednesday that Russia was in favor of easing up on supply cuts in July, which led to a bearish tone in the market.

However, subsequent reports that Russia's President Vladimir Putin agreed with Saudi Arabian Crown Prince Mohammed bin Salman on the need for "close coordination" limited declines.

OPEC+ agreed in April to reduce output by 9.7 million b/d in May and June in response to the sharp fall in demand following the COVID-19 outbreak. Saudi Arabia has since said it will cut a further 1 million b/d in June.

"Eyes will be on OPEC+ meeting next month for further directions on the market," OCBC analysts said in a note Thursday, adding that risk sentiment also faltered on rising US-China tensions.

The ongoing tensions remained a concern, especially after the US threatened to impose sanctions on China for its national security policy on Hong Kong.

The market awaits latest US EIA inventory data to be released later Thursday.