Crude oil futures traded lower on Tuesday morning due to prospects of an increase in global supply, despite progress in US-China trade negotiations.
At 9.58 am on Tuesday, July Brent oil futures were at $64.81, down by 0.23 per cent, and June crude oil futures on WTI (West Texas Intermediate) were at $61.84, down by 0.18 per cent.
May crude oil futures were trading at ₹5,255 on Multi Commodity Exchange (MCX) during the initial hour of trading on Tuesday against the previous close of ₹5,292; down by 0.70 per cent. June futures were trading at ₹5,247 against the previous close of ₹5,281; down by 0.64 per cent.
Downward pressure on oil prices remained due to the anticipated increases in crude oil supplies from the Organisation of the Petroleum Exporting Countries and allies, known as OPEC+.
In their Commodities Feed for Tuesday, Warren Patterson, Head of Commodities Strategy of ING Think, and Ewa Manthey, Commodities Strategist, said though demand has been a key concern for the oil market, supply increases from OPEC+ mean that the oil market will be well supplied through the remainder of the year. “How well supplied depends on whether OPEC+ sticks with the aggressive supply hikes we saw for May and June,” they said, adding, “For now, the pause in US-China trade tensions has not caused us to revise our price forecasts. The supply side should keep downward pressure on the market.”
Stating that sentiment across risk assets improved with the pause in US-China tariffs, they said the move to reduce tariffs for 90 days was certainly more aggressive than many expected, highlighted by the big upward moves in risk assets, including oil.
“However, while a thawing in trade tensions between China and the US is helpful, there’s still plenty of uncertainty over what happens in 90 days. This uncertainty could continue to generate headwinds for oil demand,” they added.
The market is expecting a positive outcome from the US-Iran nuclear talks, as this could help relax sanctions on Iran. This could help improve crude oil exports from Iran.
May natural gas futures were trading at ₹314.70 on MCX during the initial hour of trading on Tuesday against the previous close of ₹310, up by 1.52 per cent.
Published on May 13, 2025