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
Global Markets: Asian stocks fall as Iran war keeps oil at $100, upends rate outlook
- Asian stocks set for consecutive weeks in the red
- Traders rapidly cut Fed rate cut wagers for the year
- Investors focus on oil prices, inflation risks
SINGAPORE: Asian stocks slumped on Friday, poised for a second straight weekly decline as fast-dwindling hopes of a resolution to the US and Israel’s war with Iran kept oil prices aloft, casting a shadow over global markets and spurring inflation fears.
The US dollar has become the safe-haven of choice during the tumult, putting most other currencies under pressure. The dollar was set for a second consecutive week of gains and is up 2 percent since the war broke out at the end of February.
The yen hit its weakest level since July 2024 at 159.69 per US dollar on Friday as Japan warned that it was ready to take action to protect against yen declines. It was last at 159.41.
Analysts said the bar for intervention is higher this time around as any intervention now could prove futile in the face of the relentless dollar buying.
In Asia, MSCI’s broadest index of Asia-Pacific shares slipped 1 percent, on course for a 2.2 percent decline for the week. Japan’s Nikkei fell 1.4 percent, while tech-heavy South Korean stocks slid nearly 2 percent.
European futures point to a slightly higher open but may struggle to hold those gains on weak sentiment.
Oil prices remained close to $100 per barrel level, although they eased a bit on Friday after US issued a 30-day license for countries to buy Russian oil and petroleum products currently stranded at sea.
Brent futures were at $100.70 a barrel at 9:47 a.m. Saudi time, while West Texas Intermediate crude was at $95.59. They were both hovering around $60 levels at the start of 2026.
“Headlines are coming at the market like water from a fire hose, which is impacting the price of oil, and consequently, financial markets,” said Mitch Reznick, group head of fixed income at Federated Hermes.
“The question remains to what extent we are caught in the $80-plus range even as the headlines become banal with their frequency and contradictions.”
With Iran stepping up attacks across the Middle East as its new Supreme Leader Mojtaba Khamenei vowed to keep the Strait of Hormuz shipping lane closed, investors are bracing for a prolonged conflict and higher oil prices.
The spectre of rising inflation has led markets to rapidly reprice what they expect from central banks this year, with traders now anticipating just 20 basis points of easing from the Federal Reserve compared to 50 bps of cuts priced in last month.
The selloff in global stocks and bonds shows no signs of easing. US stocks fell sharply overnight and the two-year Treasury yields, which typically move in step with Fed interest rate expectations, scaled a six-month high on Thursday.
“With the possibility of higher oil prices still elevated, investors should be prepared for continued volatility and potentially further downside in the near term,” said Vasu Menon, managing director of investment strategy at OCBC in Singapore.
Shifting rates outlook
Jose Torres, senior economist at Interactive Brokers, said the impact of rising oil prices on corporate margins, inflation expectations, rate-cut prospects and yields is sparking volatility, leaving participants with few places to hide.
“Indeed, sinking optimism about Fed rate reductions amid strengthening cost pressures is weighing on traditional safe havens such as silver, gold, and government debt.”
The two-year note yield eased 3 bps to 3.730 percent after hitting its highest level since August 22 on Thursday. The yield has gained 35 bps in the two weeks since the war started.
The yield on the longer-dated 30-year bond has risen 24 bps this month.
Investor focus will switch to a slate of policy meetings next week with the Fed, the Bank of Japan, the European Central Bank and the Bank of England all due to meet, with most expected to keep rates unchanged. The Reserve Bank of Australia is broadly expected to hike rates next week.
In currencies, the euro was steady at $1.15035, on course for a weekly decline of nearly 1 percent. The dollar index was at 99.816, set for about a 1 percent weekly advance.
Gold was 0.4 percent higher at $5,101 per ounce on Friday but set for a 1 percent drop for the week.
