- Stalls overnight declines near $ 64.70, but bearish pressure persists.
- Rising output, escalating US-Sino trade spat and firmer USD weigh.
- Focus shifts to the API crude stockpiles data ahead of Friday’s OPEC meeting.
WTI (oil futures on NYMEX) failed to sustain the rally beyond the $ 65 mark and extended its retreat into Europe, before finding fresh buyers near $ 64.70 region to re-attempt the $ 65 supply area.
The renewed sell-off in the black gold was mainly triggered by escalating trade tensions between the US and China after the US President Trump noted he seeks additional $ 200 billion worth of trade tariffs on the Chinese goods. The renewed fears of a potential trade war spooked markets and killed the demand for the higher-yielding assets such as oil.
Also, mounting concerns over a potential output boost by the OPEC and its allies later this week combined with broad-based US dollar strength continues to add weight on the barrel of WTI.
However, the disagreements amongst the OPEC producers on the expected output hike appear to lend some support to the prices. Reuters quoted two OPEC sources, as saying that Iran, Algeria and Venezuela oppose immediate oil output rise.
Attention now turns towards the US weekly crude inventories data due to be published by the American Petroleum Institute (API) later on Tuesday for fresh trading impetus. Meanwhile, the June 22nd meeting between the OPEC and its allies in Vienna will offer fresh direction on the prices.
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