Oil Claws Back Loss With Focus on OPEC+ Supply and Trade Outlook
Oil posted a small recovery as investors weighed the prospect of more OPEC+ supply and the fallout from trade tensions between the US and China.
Brent traded above $66 a barrel after sliding 2% on Wednesday, while West Texas Intermediate was above $62. The dollar slipped, making commodities priced in the currency more appealing.
Several members of the OPEC+ group will seek another bumper supply increase in June as a dispute over quota compliance worsens, Reuters reported, citing people familiar with the matter.
Growing strain within the alliance, particularly with perennial overproducer Kazakhstan, have stoked fears that output will continue to rise at a faster-than-advertised pace over the coming months. The Organization of the Petroleum Exporting Countries and its allies will hold a meeting on May 5 to decide what to do in June.
“Until compliance improves, we believe OPEC+ can continue to unwind faster than planned,” said Amrita Sen, co-founder of consultant Energy Aspects. “But also that faster unwind can continue for more than just June.”
Oil has dropped sharply this month on concerns that US tariffs and counter-levies from its biggest trading partners will hit economic activity and impact energy demand. While there are signs of easing tensions between Washington and Beijing, Treasury Secretary Scott Bessent said President Donald Trump hasn’t offered to take down duties on a unilateral basis.
Brent for June settlement was up 0.3% at $66.35 a barrel at 10:12 a.m. in London.
WTI for June delivery climbed to $62.55 a barrel after tumbling 3.2% on Wednesday, the biggest loss in two weeks.
US crude stockpiles, meanwhile, expanded by 244,000 barrels last week, according to government data. That compares with an industry report that indicated inventories had shrunk the most this year.
Still, some metrics are pointing to a bullish near-term market. The prompt spread for benchmark Brent is in the widest backwardation since January, a structure that signals tighter supply.
Source : Bloomberg
