Singapore — Crude oil futures slipped in Asian mid-morning trade Tuesday, as ongoing trade tensions kept investor sentiment bearish amid a weaker demand outlook, analysts said.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
At 11:15 am Singapore time (0315 GMT), ICE Brent August futures were down 34 cents/b (0.55%) from Monday's settle at $60.94/b, while the NYMEX July light sweet crude futures contract was 19 cents/b (0.36%) lower at $53.06/b.
"Oil is extremely oversold, but the demand side risks support further weakness," OANDA's senior market analyst Edward Moya said.
"Since the situation is tense with Mexico, the demand outlook is likely to get a massive downgrade if we do not see a quick resolution before the June 10 deadline," Moya added.
US President Donald Trump had threatened higher import tariffs on Mexican goods last week, which led to a selloff in the market.
In addition, the US-China trade tensions have intensified, with Chinese retaliatory tariffs on US imports having come into force on June 1.
While OPEC members are expected to decide on production cut extensions at the upcoming June 25 OPEC meet in Vienna, the trade tensions are likely to cap price recovery in the near term, analysts said.
"The downward momentum appears intact for now and long speculators are exiting their positions," OCBC analysts said Tuesday.
"We expect support for Brent at $55/bbl. The M1/M12 calendar spread on Brent has also collapsed from $5.22/bbl to $2.46/bbl, suggesting that spot demand for energy is dampening," the analysts added.
At 0315 GMT, the US dollar index was down 0.04% to 97.10.
--Jeslyn Lerh, firstname.lastname@example.org
--Edited by Norazlina Juma'at, email@example.com