SINGAPORE: Oil prices edged up along with global markets on Tuesday on cautious optimism over the outcome of a summit between U.S. President Donald Trump and North Korean leader Kim Jong Un in Singapore.
But movements in crude markets were limited as traders said they were reluctant to take on large new positions ahead of a meeting between producer cartel OPEC and some of its allies on June 22.
Brent crude futures were trading at $76.56 per barrel at 0201, up 10 cents from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $66.24 a barrel, up 14 cents from their last settlement.
Crude has been supported by healthy demand and voluntary production cuts led by the Organization of the Petroleum Exporting Countries (OPEC), but analysts said oil markets were also currently heavily driven by public policy events and statements.
Trump and Kim on Tuesday started a one-day summit in Singapore with the goal to narrow differences over how to end a nuclear standoff on the Korean peninsula.
Global markets edged up as the highly anticipated U.S.-Korea summit got underway in Singapore amid expressions of goodwill.
In oil market fundamentals, however, not all things point to higher prices, with output from the three biggest producers, Russia, the United States and Saudi Arabia on the rise.
Russian production has reportedly climbed from below 11 million barrels per day (bpd) to 11.1 million bpd in early June.
In the United States, output has risen by almost a third in the last two years, to a U.S. record of 10.8 million bpd.
Now, top exporter Saudi Arabia – which has so far led OPEC’s efforts to withhold supplies – is also showing signs of upping production.
Saudi Arabia has told OPEC that it raised oil output to a little more than 10 million bpd in May, up from 9.9 million bpd in April.
OPEC, together with some non-OPEC producers including Russia, started withholding output in 2017 to end a global supply overhang and prop up prices.
OPEC and its partners are due to meet on June 22 at the cartel’s headquarters in Vienna, Austria, to discuss policy.
