Oil held losses as economic indicators continue to look weak and Opec and its allies are still struggling to set a date to discuss an extension to supply cuts.
Futures lost as much as 0.8% in New York after retreating 1.1% on Monday. The dollar firmed as the European Central Bank said it may pump more stimulus into the region’s economy as risks to growth increase. It follows a slew of weak US data on Monday. All the while, the Organisation of Petroleum Exporting Countries and its allies have shifted their focus to mid-July for the next meeting to discuss extending production cuts, after talks between Russia and Iran made some progress toward resolving a standoff over the date.
Oil has lost about 20% since late April as growing American inventories and an entrenched trade dispute between the US and China continue to cloud the demand outlook. While last week’s attacks on two tankers near the Strait of Hormuz raised concerns about a disruption to crude flows, focus has returned to Opec’s attempts to fix a meeting on supply cuts which are due to expire at the end of the month.
“The market is largely demand-led once again, while the fact that Opec+ can’t agree on a date doesn’t help,” said Warren Patterson, head of commodities strategy at ING Bank.
West Texas Intermediate for July delivery slid 23 cents to $51.70 a barrel on the New York Mercantile Exchange as of 11:05 am London time. Futures ended Monday 1.1% lower at $51.93 after capping a 2.7% weekly loss on Friday.
Brent for August settlement lost 33 cents to $60.57 a barrel on London’s ICE Futures Europe Exchange. Futures slid $1.07 to close at $60.94 on Monday. The global benchmark crude traded at a $8.62 premium to WTI for the same month.
After a meeting on Monday, Opec and its allies appeared to be moving toward mid-July as a possible date for the next meeting to discuss output cuts. Their failure to agree a date has given turbulent oil markets little reassurance about the future of production cuts, just as crude prices extend their slump. Iran said Monday it was willing to hold a meeting July 10-12. The group had originally planned to meet next week.
The dispute over the timing of the meeting is playing out amid a broader geopolitical confrontation as Saudi Arabia accuses Iran of complicity in attacks on the two oil tankers. Iran has denied culpability.
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