Singapore — Crude oil futures were lower in mid-morning trade in Asia Friday as profit-taking emerged in the wake of Brent crude briefly crossing the $70/b-mark overnight on supply tightness and optimism over the US-China trade talks.
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At 10:30 am Singapore time (0230 GMT), ICE June Brent crude futures were down 26 cents/b (0.37%) from Thursday's settle at $69.14/b, while the NYMEX May light sweet crude contract was 8 cents/b (0.13%) lower at $62.02/b.
"Brent oil prices poked above $70/b before easing later on, while the US WTI benchmark fell -- expectations of tighter supply are being offset by a mixed picture of global demand and ongoing strength in US production," St George Bank senior economist Janu Chan said.
"Supply-side issues continue to drive sentiment, with the market facing issues in Iran, Venezuela and Libya," ANZ analysts said in a note Friday.
"The Trump administration faces a key decision as to whether to extend waivers on US sanctions on Iran. This comes as the risk of further disruptions rises sharply. In Venezuela, ongoing power issues and political instability are weighing on crude oil output. Tension is also mounting around OPEC member Libya," the ANZ analysts added.
Libya's eastern military leader General Khalifa Haftar Thursday ordered his troops to advance on Libya's capital Tripoli.
"Haftar's takeover of southwestern territory and oil fields materialized much faster and easier than we expected, tipping the balance of power in the civil war solidly in his favor," said S&P Global Platts Analytics chief geo-political adviser Paul Sheldon.
"The next potential flashpoint for renewed conflict comes at an April 14-16 political conference. Haftar today ordered a move on Tripoli and looks to be pushing for a deal to give him more control of Libya. But Haftar's rivals may also organize against him," Sheldon added.
The conference is being held by the UN in Ghadames in a bid to find a peaceful solution to the Libyan conflict.
Meanwhile, trade negotiations between the US and China showed strong signs of progress early Friday, with China's state-backed news agency Xinhua noting that the two countries had "reached new consensus" on the text of an economic and trade agreement.
Still, some analysts remained skeptical about whether a US-China trade deal will ultimately be forged.
"Early morning, positive risk sentiments were given a slight boost by President Xi's upbeat comment on the Sino-US trade front. Nevertheless, the risk rally may be showing some signs of exhaustion, with only nice sound-bites but no concrete developments to chew on," OCBC analysts said in a note Friday.
Market participants are awaiting the release of Baker Hughes' US rig count data -- an early indicator of future US crude production -- later Friday for further pricing cues. The US oil rig count has fallen for the last six weeks.
As of 0230 GMT, the US Dollar Index was down 0.03% at 96.900.
--Jin Ming Lim, firstname.lastname@example.org
--Edited by Wendy Wells, email@example.com