London — Crude oil futures showed small increases in morning trading in Europe Tuesday, amid apparent discord between key producers Saudi Arabia and Russia.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
At 1131 BST, August ICE Brent futures were up 9 cents from Monday's settle at $62.38/b while the NYMEX July light sweet crude futures contract was 49 cents higher at $53.75/b.
Prices received some support from Saudi energy minister Khalid al-Falih's comments that OPEC will probably extend its production cuts into the second half of the year.
There are other supply concerns as well but demand looks uncertain amid bearish macroeconomic signals.
"Futures are pinned between economic unrest and the upcoming OPEC meeting...and turmoil surrounding Iran supply," Michael Poulsen, senior oil risk manager at financial consultancy Global Risk Management, said.
The next ministerial meeting between OPEC and non-OPEC oil producers is June 26 in Vienna.
It is hard to say whether the current supply and geopolitical climate will lead to a different decision from the December one, when the current round of output limitation was decided.
"It's always different, there's always something going on when they have meetings, it's just a question of what it is. They could be focusing on Iran or supply out of Venezuela or both. Plus there is Libya," Poulsen said.
Saudi Arabia's crude output fell to its lowest point in over four years in May as it kept some fields offline and pumped 9.70 million b/d during the month, a 120,000 b/d drop from April, the latest S&P Global Platts survey showed Friday.
The kingdom has produced well below its quota of 10.31 million b/d in May under the existing OPEC/non-OPEC supply agreement, which took effect in January.
The news from Russia has been less price-supportive. Russia is not ready to commit to further production cuts under an OPEC/non-OPEC supply agreement, with the oil markets facing many uncertainties in the months ahead, Russian energy minister Alexander Novak said Monday.
In the immediate term, analysts polled by Platts Monday were split whether this week's US Energy Information Administration data will show a draw in crude inventories for the week ending June 7.
While refinery runs are expected to rise 0.5 percentage point to 92.3% of capacity as plants exit maintenance, boosting crude demand, that demand may be easily satisfied by domestic production and imports.
--Tom Washington, email@example.com
--Edited by Jonathan Loades-Carter, firstname.lastname@example.org