Crude oil futures steady as market awaits further OPEC+ updates

Singapore — Crude oil futures were largely steady during mid-morning trade in Asia on June 5 as the market looks towards fresh supply cues from OPEC+, with uncertainty lingering over the upcoming meeting.

At 10:35 am Singapore time, ICE Brent August crude futures was 6 cents/b (0.15%) lower from the settle on June 4 at $39.93/b, while the NYMEX July light sweet crude contract was 13 cents/b (0.35%) lower at $37.28/b.

Investors are still awaiting further clarity on the OPEC+ talks, which have yet to be scheduled on a fixed date.

Talks have been bogged down over quota compliance, with Saudi Arabia insisting on firm commitments from other OPEC+ members to stick to their production quotas.

"The primary point of contention is centered on Iraq and Nigeria's long-standing non-compliance to virtually all of OPEC+ production deals," AxiCorp's chief global markets strategist Stephen Innes said in a June 5 note.

Saudi Arabia and Russia have been seeking guarantees from Iraq and other members such as Nigeria and Kazakhstan, to adhere to quotas and compensate for overproduction with deeper cuts in the coming weeks, Platts reported.

The deal to extend the alliance's hefty 9.7 million b/d production cut agreement through at least July still hangs on a balance for now, keeping sentiment uncertain.

"The growing fear is that not only will a deal to extend the deep cuts not be reached, but producers may even relax their current over-compliance," ANZ analysts said in a June 5 note.

Sentiment was also weighed by stubbornly weak demand in the US, ANZ analysts added, citing the swell in gasoline inventories based on EIA data released on June 3.

In recent US-China developments, China said on June 4 that it will ease restrictions on international air travel, hours after the US threatened to bar passenger flights from China from June 16, according to media reports.