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
India seals $3bn LNG agreement with UAE
- Leaders hold talks to strengthen trade, defense ties
NEW DELHI, DUBAI: India signed a $3 billion deal on Monday to buy liquefied natural gas from the UAE, making it the Gulf country’s top customer, as the leaders of both countries held talks to strengthen trade and defense ties.
The agreement was signed during a very brief two-hour visit to India by UAE President Sheikh Mohammed bin Zayed Al-Nahyan for talks with Indian Prime Minister Narendra Modi.
They pledged to double bilateral trade to $200 billion in six years and form a strategic defense partnership.
Abu Dhabi state firm ADNOC Gas will supply 0.5 million tonnes of LNG a year to India’s Hindustan Petroleum Corp. for 10 years, the companies said.
ADNOC Gas said the agreement brings the total value of its contracts with India to over $20 billion.
“India is now the UAE’s largest customer and a very important part of ADNOC Gas’ LNG strategy,” the company said.
The UAE is India’s third largest trading partner and Sheikh Mohammed was accompanied by a government delegation that included his defense and foreign ministers. The two sides signed a letter of intent to work toward forming a strategic defense partnership, India’s Foreign Secretary Vikram Misri told reporters.
Misri, however, said that the signing of the letter of intent with the UAE does not mean that India will get involved in regional conflicts.
“Our involvement on the defense and security front with a country from the region does not necessarily lead to the conclusion that we will get involved in particular ways in the conflicts of the region,” he said.
