Oil rises on supply cuts, but weak economy holds market back

Lloyd Doyle
June 11, 2019

U.S. WTI crude futures were up 0.6% to $53.59, while global benchmark Brent gained 0.3% to $62.45.

SINGAPORE, June 11 (Reuters) - Oil prices rose on Tuesday in line with firmer financial markets and bolstered by expectations that producer group OPEC and its allies will keep withholding supply.

All eyes will be on the upcoming The Organization of the Petroleum Exporting Countries (OPEC) meeting during June 25-26, when it decides its output policy for the rest of the year. "A lot depends on the market in the third quarter, on the supply and demand balance", he said, citing the effect of US-led trade wars and sanctions.

The sixth meeting of the Saudi-Russian Joint Committee on Trade, Economic and Scientific Cooperation was held in Moscow on Monday under co-chairmanship of Saudi Minister of Energy, Industry and Mineral Resources Khalid al-Falih and Russian Energy Minister Alexander Novak, reported the Saudi Press Agency.

"The market has seen pressure over the last couple of weeks due to the significant rise in crude and product inventories here in the US that has pressured prices as the market now awaits the outcome of the upcoming OPEC and non-OPEC producers' meeting", said Andrew Lipow of Lipow Oil Associates in Houston.

"It seems likely that OPEC will roll over the current supply cuts at the next meeting", said Callum MacPherson, head of commodities at investment bank Investec.

"As U.S. -China tariff concerns heighten, we see more downward adjustments to world oil demand both across this year and next in providing a limiter on occasional price advances", Jim Ritterbusch of Ritterbusch and Associates said in a note.

Russian Federation is the only party of an OPEC oil cuts agreement to be holding off on an extension, Saudi Arabia has said.

Energy consultancy FGE said global crude oil demand growth could drop below 1 million barrels per day (bpd) in 2019, down from previous expectations of 1.3 to 1.4 million bpd.

Stephen Innes, managing partner at Vanguard Markets, said stronger stock markets also supported oil futures.

Other reports by Iphone Fresh

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