Singapore — Crude oil futures were lower during mid-morning trade in AsiaTuesday, as markets digested a flurry of news and data on geopolitics andfundamentals just days ahead of the key OPEC/non-OPEC meeting at Vienna.
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"Oil prices have sold off over the past three weeks on concerns overhigher OPEC production, weaker EM [emerging markets] demand, escalating tradewars and rising inventories," Goldman Sachs analysts said in a note.
At 10:45 am Singapore time (0245 GMT) Tuesday, August ICE Brent crudefutures were down 43 cents/b (0.57%) from Monday's settle to $74.91/b, whilethe NYMEX July light sweet crude contract was down 25 cents/b (0.38%) at$65.60/b.
After losing close to 4% over the previous week, both the benchmarkcontracts bounced back higher on Monday, with the European benchmark contractrising close to $2/b day on day.
"Oil prices recovered from its decline likely on short-coveringbehavior," OCBC commodity economist, Barnabas Gan, said.
Market focus remains on the OPEC meeting, with expectations of a rise inoutput by a modest 300,000 b/d to 600,000 b/d, analysts said.
OPEC is set to meet on June 22 in Vienna to decide the future of the oilproduction cut deal, with non-OPEC partners including Russia, joining themeeting a day later.
"In the lead up to Friday's OPEC meeting, the swivel of talks continue todominate price action and the latest expectations that OPEC could contemplatelifting production below earlier cited levels of over 1.0 million barrels perday had been the latest driver," IG market strategist Pan Jingyi said.
"One cannot place enough emphasis on the importance of this upcomingmeeting for the ripple effect across asset classes," she added.
"After the OPEC meeting, we believe that the tightness of the oil marketwill be the catalyst for Brent prices to rally, through steeperbackwardation," Goldman Sachs analysts said.
Meanwhile, US shale oil production is slated to rise by 141,000 b/d monthon month in July, federal figures released Monday showed.
Analysts surveyed Monday by S&P Global Platts expect US crude stocks tohave declined by 3.7 million barrels for the week ended June 15. In additionto stocks, market participants are also expected to keep an eye on US exportdata amid a tighter ICE Brent/NYMEX spread and doubts over China's ability toabsorb US barrels.
The trade war between the US and China escalated on Saturday with Chinathreatening an additional 25% tariff on $50 billion worth of US goods,including energy and agricultural products, in response to PresidentDonald Trump's similar decision on Chinese product imports.
Preliminary data on last week's US inventory levels is due for releasefrom the American Petroleum Institute later Tuesday, and the more definitivenumbers from the US Energy Information Administration later Wednesday.
As of 0245 GMT, the US Dollar Index was down 0.61% at 94.25
--Avanika Ramesh, firstname.lastname@example.org
--Edited by Geetha Narayanasamy, email@example.com