SINGAPORE: Oil markets were stable on Tuesday amid cautious optimism over the outcome of a summit between US President Donald Trump and North Korean leader Kim Jong Un in Singapore.
Movements in crude markets were also limited ahead of a meeting between the Organization of the Petroleum Exporting Countries (OPEC) and some of its allies on June 22 that may determine the crude production policy of several major producers.
Brent crude futures were trading at $76.45 per barrel at 0355 GMT, little changed from their last close.
US West Texas Intermediate (WTI) crude futures were at $66.16 a barrel, up 6 cents from their last settlement.
Crude has been supported by healthy demand and voluntary production cuts led by OPEC, but analysts said oil markets were also currently heavily driven by public policy events and statements.
Trump and Kim on Tuesday met for a one-day summit in Singapore with the goal to narrow differences over how to end a nuclear standoff on the Korean peninsula, with Trump stating he had forged a “good relationship” with the North Korean leader.
“And today marks the potentially momentous meeting between Donald Trump and North Korean leader Kim Jong Un in Singapore,” said Shannon Rivkin, investment director at Australia’s Rivkin Securities.
Global markets edged up as the highly anticipated summit got underway amid expressions of goodwill.
“Any positive outcome could be good news for markets,” Rivkin added.
Oil market fundamentals, however, point to lower prices, with output from the three biggest producers, Russia, the United States and Saudi Arabia on the rise.
Russian production has reportedly climbed from below 11 million barrels per day (bpd) to 11.1 million bpd in early June.
In the United States, output has risen by almost a third in the last two years, to a record of 10.8 million bpd.
“The deluge of US crude production continues to hold the top-side in check,” said Stephen Innes, head of trading at futures brokerage OANDA.
Now, top exporter Saudi Arabia — which has so far led OPEC’s efforts to withhold supplies — is also showing signs of raising production.
Saudi Arabia has told OPEC that it increased oil output to a little more than 10 million bpd in May, up from 9.9 million bpd in April.
“This fits with the theory that the Saudis and Russians are subtly moving toward a change to the agreement at this month’s meeting,” said Greg McKenna, chief market strategist at futures brokerage AxiTrader.
OPEC, together with some non-OPEC producers including Russia, started withholding output in 2017 to end a global supply overhang and prop up prices.
OPEC and its partners are due to meet at its headquarters in Vienna, Austria, to discuss policy.
“Expect more of the same whippy markets driven by rumors and innuendo ahead of the June 22 Vienna OPEC meeting,” Innes said.
Oil stable amid cautious optimism over Trump, Kim summit in Singapore
Oil stable amid cautious optimism over Trump, Kim summit in Singapore
US pump prices surge as Iran war upends global energy supply
- Fuel prices jump over 10 percent as oil prices surge
- Analysts predict further price rises due to market conditions
MARIETTA/NEW YORK : US retail gasoline and diesel prices are soaring as the US-Israel war with Iran constrains oil and fuel exports, which could be a political test for President Donald Trump’s Republican Party ahead of midterm elections in November.
Fuel prices jumped more than 10 percent this week as oil rose above $90 a barrel, its highest in years, adding pain at the pump for consumers already strained by inflation.
Trump on Thursday shrugged off higher gasoline prices in an interview with Reuters, saying “if they rise, they rise.”
The president had vowed to lower energy prices and unleash US oil and gas drilling during his second term, but much of his tenure has been marked by volatility and uncertainty amid shifts in policies like tariffs and geopolitical turmoil.
The US is the world’s largest oil producer. It is a major exporter but also imports millions of barrels a day since it is the world’s largest oil consumer.
As of Friday, the national average prices for regular gasoline stood at $3.32 a gallon, up 11 percent from a week ago and the highest since September 2024, according to data from the motorists association AAA. Diesel was at $4.33, up 15 percent from a week ago, surging to the highest since November 2023.
Midwest, south feel the pinch
US motorists in parts of the Midwest and the South, including states that supported Trump, have seen some of the steepest increases in fuel costs since the conflict in Iran started.
In Georgia, a swing state, average retail gasoline prices rose 40.1 cents a gallon over the past week, according to fuel tracking site GasBuddy.
Andrenna McDaniel, a health care insurance worker in South Fulton, Georgia, said she was surprised to see prices skyrocket overnight.
“They jumped up so quickly,” she said on Friday, adding that she does not agree with the war at all.
McDaniel, a Democrat, said that for now she is only driving for the most important things, and feels lucky that she works from home so she does not have to drive as much as other people do. Georgia voted for Donald Trump in the 2024 election.
Trump voter Richard Soule, 69, a US Air Force veteran and a retired firefighter, said a little pain at the pump is worth Trump’s efforts to protect America.
“When President Trump went in there and bombed out their nuclear, and they just thumbed their nose at it, I believe he did the right thing at the right time,” Soule said on Friday as he filled up his Ford F-150 truck in Marietta, Georgia.
Other states, including Indiana and West Virginia have seen prices rise by 44.3 cents and 43.9 cents, respectively.
Prices may rise further
More pain may be on the way, analysts said, as oil prices continue to trend upward. On Friday, US oil futures settled at $90.90 a barrel, up nearly $10 and the biggest single-day rise since April 2020.
“Given current market conditions, the national average price of gasoline could climb toward $3.50 to $3.70 per gallon in the coming days if oil continues rising and supply disruptions persist,” GasBuddy analyst Patrick De Haan said.
The disruptions in the Middle East and the Strait of Hormuz, a key trade conduit, have boosted demand for US oil abroad, which in turn has driven up prices for domestic refiners too.
“The US has weaned itself off of its dependence on Middle Eastern crude, but obviously Asian refineries, and to a lesser extent, European refineries have not,” Denton Cinquegrana, chief oil analyst with OPIS. “That’s what you’re seeing happen in the spot market, because the demand for US exports rise, and so the price rise.”
Seasonal factors could add further pressure. Gasoline prices typically go up in the spring and peak in the summer due to higher gasoline demand and production of summer-blend gasoline, which is more costly to produce. Diesel fuel saw an even more aggressive jump since Iran began retaliating against US and Israeli strikes, significantly disrupting shipping in the Strait of Hormuz.
Global diesel inventories have remained in tight supply due to heavy demand for heating and power generation during a prolonged winter in the US and other parts of the world and a structural tightness of refining capacity. Sticker prices of everything from food to furniture go up when the cost of diesel goes up, as the fuel is mainly used in freight transportation, manufacturing, agriculture, and global shipping, analysts said.
“In a world where buzzword seems to be ‘affordability’, that is certainly not going to help,” Cinquegrana said.
