Oil prices made only modest moves on Tuesday, settling roughly unchanged for the session, as traders weighed uncertainty surrounding a supply decision by OPEC and its allies and awaited a report that’s expected to reveal a modest, second straight weekly rise in U.S. crude supplies.
“With bulls lacking a major catalyst, the market could remain in a funk until month’s end as [the Organization of the Petroleum Exporting Countries’] production restrictions vie with continued uncertainty over U.S.-China trade tensions,” said Stephen Innes, managing partner at Vanguard Markets, in a daily note.
West Texas Intermediate crude for July delivery on the New York Mercantile Exchange rose by one cent, or 0.02%, to settle at $53.27 a barrel, while August Brent crude settled unchanged at $62.29 a barrel on ICE Futures Europe.
Oil futures finished lower on Monday as investors focused on worries about slowing global growth after weaker import data from China and doubts about Russia’s willingness to extend production curbs beyond their expiration this month. Still, the Trump administration’s decision to call off plans to raise tariffs on Mexican goods has offered some support for oil prices.
Crude has moved in relatively choppy fashion after the U.S. benchmark last week fell by at least 20% from a recent peak, meeting the widely accepted definition for a bear market.
“The rebound in recent sessions had been attributed to the U.S./Mexico deal on the border to avoid tariffs, improved overall sentiment and suggestions from Saudi Arabia that an extension was effectively guaranteed,” said Craig Erlam, analyst with Oanda. However, “there still appears to be little idea of how much Russian involvement there will be in an extension, and with the date of the OPEC+ meeting now looking like early July, perhaps producers are looking to make a decision with one eye on the outcome of the Trump/ Xi meeting.”
Uncertainty remains around OPEC extending an agreement to curb output that took effect at the beginning of the year. Russian Energy Minister Alexander Novak on Monday said he couldn’t rule out a scenario in which oil falls to $30 a barrel if a global agreement wasn’t extended, according to Reuters.
OPEC members pumped 30.09 million barrels a day in May, the lowest since February 2015, before Gabon, Equatorial Guinea and Congo joined the group, though Qatar was still a member at the time, according to an S&P Global Platts survey.
Over in the U.S., the Energy Information Administration reduced its forecasts for 2019 oil prices and U.S. crude-oil production, according to its Short-term Energy Outlook report released Tuesday. The EIA forecasts 2019 domestic crude production of 12.32 million barrels a day, down 1% from the May forecast. It also cut its 2020 output view by 0.9% to 13.26 million barrels a day.
For 2019, the government agency lowered its WTI crude price outlook by 5.6% to $59.29 a barrel and its Brent view by 4.2% to $66.69. It left its 2020 price forecasts unchanged.
Weekly U.S. petroleum supply figures are due early Wednesday from the EIA. Analysts polled by S&P Global Platts expect to see a slight rise of 80,000 barrels in crude supplies for the week ended June 7. Gasoline stocks are seen down by 380,000 barrels, while distillates are likely to have climbed by 704,000 barrels, the survey said.
Monthly oil reports from OPEC and the International Energy Agency will be released on Thursday and Friday, respectively. The IEA’s report will include forecasts for 2020.
In other energy trading, July gasoline rose 1.5% to $1.756 a gallon, while July heating oil rose 0.9% to $1.822 a gallon.
Natural gas for July delivery settled at $2.399 per million British thermal units, up 1.8%.