SINGAPORE/HOUSTON: Oil prices edged down in Asian trade on Tuesday, after posting gains in the previous session, as markets remained cautious about global demand growth prospects amid expectations of stronger supplies, according to Reuters.

Global benchmark Brent crude futures slipped 12 cents, or 0.14 percent, to $84.13 per barrel at 9:15 a.m. Saudi time. US West Texas Intermediate crude futures fell 14 cents, or 0.17 percent, to $80.19 a barrel.

Both benchmarks gained around 2 percent on Monday, closing at their highest since April.

“The oil market shifted its focus back to fundamentals, which have been soft for some time,” said BoFA commodity and derivatives strategist Francisco Blanch in a client note, adding that global crude oil inventories and refined product storage in the US and Singapore, among other places, was higher.

Meanwhile, global oil demand growth decelerated to 890,000 barrels per day year-on-year in the first quarter, and data suggests consumption growth likely slowed further in the second quarter, he said in the note.

China’s oil refinery output slipped 1.8 percent from year-ago levels in May, statistics bureau data showed on Monday, as refiners undertook planned maintenance overhauls and processing margins were pressured by rising crude costs.

Markets were also looking out for further clues on interest rates, and how the US demand situation would pan out, as several US Federal Reserve representatives will be speaking later on Tuesday.

Some analysts remained bullish on the price impact of an extension by the OPEC+ group of supply cuts in the near-term.

“The latest guidance provided by OPEC+, as well as their unchanged 2.25 million barrels per day demand growth outlook, signals a stagnation in oil supply growth for 2024 and an apparent downside risk to production in 2025,” said Patricio Valdivieso, Rystad Energy vice president and global lead of crude trading analysis.

“Under these conditions — and the disconnect between the OPEC+ demand outlook and all other agencies — it is hard to remain fully bearish when global oil supply growth appears decimated,” he added.

Recent rebounds in complex refining margins, particularly in Europe and Asia, were also supportive to markets, said Sparta Commodities analyst Neil Crosby.

Refining margins at a typical complex refinery in Singapore averaged at $3.60 a barrel for June so far, compared with $2.66 a barrel in May. 

RIYADH: Saudi Arabia’s crude production increased by 13,000 barrels per day in April to reach 8.99 million, according to an analysis from the Joint Organizations Data Initiative. 

The data indicated that exports over the same month saw a decline despite this growth, dipping by 445,000 bpd to 6 million compared to March.

The Kingdom’s direct burn of crude oil, which involves using oil without substantial refining processes, increased by 93,000 bpd in April compared to the previous month – an 11 percent year-on-year growth. 

The decline in the Kingdom’s crude exports and a marginal rise in production can be attributed to the voluntary cuts adopted by members of the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+.

In March, Saudi Arabia announced the extension of its 1 million bpd cut, initially implemented in July 2023, until the end of 2024. 

Earlier this month, the Kingdom’s Minister of Energy Prince Abdulaziz bin Salman said Saudi Arabia will increase its oil production capacity from 2025 to 2027 before returning to a production level of 12.3 million bpd in 2028. 

“In 2025, we will have an incremental increase. We will have a bigger incremental increase in 2026 and 2027. And then we will go back to our 12.3 million bpd production in 2028,” said the energy minister. 

According to JODI Data, total oil demand in India, one of the largest crude consumers in Asia, slipped by 156,000 bpd in April compared to March. 

Similarly, the Asian nation’s total product exports also edged down by 85,000 bpd in April. 

On the other hand, India’s overall crude imports rose by 510,000 bpd, marking an 8.1 percent year-on-year increase. 

Earlier this month, OPEC said that oil demand globally would rise by 2.25 million bpd in 2024, driven by growth in markets such as China, India, the Middle East and Latin America. 

On June 6, speaking at the International Economic Forum in St. Petersburg, Haitham Al-Ghais, secretary-general of OPEC, said that the world will witness continued oil demand growth in the coming years. 

“Last year, OPEC’s forecast for oil demand was the best. And all those who criticized OPEC’s forecast kept adjusting their number throughout the year,” said Al-Ghais.

However, the International Energy Agency forecast oil demand growth to slow as the world continues its energy transition journey, although it noted that there would be growth of 1 million bpd in 2024.