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Oil Prices Rise but Trade Concerns Limit Gains

Published 05/21/2019, 01:13 AM
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Investing.com - Oil prices continued to rise on Tuesday in Asia, but gains were capped by concerns over the intensifying trade war between China and the U.S.

U.S. crude oil WTI futures were up 0.5% to $63.51. International Brent oil futures gained 0.4% to $72.21.

Oil prices received some continued support from indications that OPEC and its allies will extend production cuts beyond June.

Khalid Al-falih, the Saudi energy minister, indicated over the weekend that the kingdom will continue cutting output through the year-end at levels above compliance agreed by OPEC+. He also expressed hope that his other colleagues in the alliance would do the same.

Oil prices rose on Monday following his comments, but came off session highs after Minister of Energy of Russia Alexander Novak told Bloomberg in an interview that OPEC+ may need "to tweak" the current production deal when it meets next month.

One option on the table is "removing the over-compliance" with current targets, Novak said, a move that would effectively ease output cuts in the second half of the year.

Oil was also pulled down by concerns that a prolonged Sino-U.S. trade war could lead to a global economic slowdown, which would hit the demand outlook for oil.

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