SINGAPORE: Oil prices stabilized on Tuesday on expectations that producer group OPEC and its allies will keep withholding supply to prevent prices from tumbling amid a broad economic slowdown which has started eating away at fuel demand growth.
Front-month Brent crude futures, the international benchmark for oil prices, were at $62.36 at 0023 GMT, 7 cents, or 0.1%, above Friday's close.
U.S. West Texas Intermediate (WTI) crude futures were at $53.42 per barrel, 16 cents, or 0.3%, above their last settlement.
Prices fell by around 1% in the previous session and crude futures are down by some 20% from their 2019 peaks in late April, dragged lower by a widespread economic downturn that has started to impact oil consumption.
Russia on Monday said it might support an extension of supply cuts that have been in place since January, warning oil prices could fall as low as $30 per barrel if producers supply too much crude.
The Organization of the Petroleum Exporting Countries (OPEC) and some non-affiliated producers including Russia, known collectively as OPEC+, have withheld supplies since the start of the year to prop up prices.
OPEC+ is due to meet in late June or early July to decide output policy for the rest of the year.
"Due to the general fear of an economic downturn ... (and) the realization that demand growth is slowing ... no one will argue for abandoning (the) OPEC+ accord," said Fereidun Fesharaki, chairman of energy consultancy FGE, in a note published on Tuesday.
FGE said global crude oil demand growth could drop below 1 million barrels per day (bpd) in 2019, down from previous expectations of 1.3 to 1.4 million bpd.
"This effectively gives us an extra 300,000-400,000 barrels per day of supply," said Fesharaki. - Reuters
Oil price falls 1pct amid US-China trade dispute
NEW YORK: Oil prices fell more than 1% on Monday as U.S.-China trade tensions continued to threaten demand for crude and as major producers Saudi Arabia and Russia had yet to agree on extending an output-cutting deal.
Brent crude futures fell $1, or 1.6%, to settle at $62.29 a barrel. U.S. West Texas Intermediate (WTI) crude lost 73 cents, or 1.4%, to end at $53.26 a barrel.
U.S. President Donald Trump said he was ready to impose another round of punitive tariffs on Chinese imports if he does not reach a trade deal with China's president at a Group of 20 summit later this month.
China's foreign ministry said that China is open for more trade talks with Washington but has nothing to announce about a possible meeting.
China's crude oil imports slipped to around 40.23 million tonnes in May, from an all-time high of 43.73 million tonnes in April, customs data showed, due to a drop in Iranian imports caused by U.S. sanctions and refinery maintenance.
"As U.S.-China tariff concerns heighten, we see more downward adjustments to world oil demand both across this year and next in providing a limiter on occasional price advances," Jim Ritterbusch of Ritterbusch and Associates said in a note.
Barclays bank, in a note, said its economists had revised down their GDP growth outlook for the United States, China, India and Brazil - countries that account for more than three-quarters of their oil demand growth assumptions for this year.
"The revisions imply a 300,000 barrel per day reduction in our current global oil demand outlook of 1.3 million barrels per day year-on-year for this year," the British bank said.
On the supply side, Saudi Energy Minister Khalid al-Falih said Russia was the only oil exporter still undecided on the need to extend the output deal agreed by top producers.
The Organization of the Petroleum Exporting Countries and some non-members, including Russia, have withheld supplies since the start of the year to prop up prices. The deal is due to expire this month.
Yet, Russian energy minister Alexander Novak said there is a still a risk that oil producers pump out too much crude and prices fall sharply. Novak said he could not rule out a drop in oil prices to $30 per barrel if the global deal was not extended.
Many oil exporting countries have confirmed they are prepared to hold a policy meeting with OPEC in Vienna over July 2-4, instead of the scheduled date later this month, Novak said.
In the United States, crude production has surged, rising to a weekly record at 12.4 million barrels per day, while crude stockpiles have climbed close to two-year highs, according to the Energy Information Administration's data last week. [EIA/S]
"The market has seen pressure over the last couple of weeks due to the significant rise in crude and product inventories here in the U.S. that has pressured prices as the market now awaits the outcome of the upcoming OPEC and non-OPEC producers' meeting," said Andrew Lipow of Lipow Oil Associates in Houston. - Reuters