SINGAPORE: Oil prices dipped on Tuesday, easing after strong gains in the previous session when hopes that trade disputes between the United States and China could be resolved buoyed global markets.
Despite a softening of trade concerns, oil markets still face an abundance of supplies that puts pressure on producers to keep their prices competitive in order not to lose market share.
U.S. WTI crude futures were at $63.26 a barrel at 0031 GMT, down 16 cents, or 0.3 percent, from their previous settlement.
Brent crude futures were at $68.52 per barrel, down 13 cents, or 0.2 percent.
The dips came after a more than 2 percent rally on Monday during European and American trade hours.
Concerns of a prolonged trade dispute between the world’s two biggest economies and uncertainty over the supply and demand balance of global oil markets have resulted in volatile yet range-bound recent trading.
The American Petroleum Institute is due to publish oil storage data later on Tuesday while official data from the U.S. Energy Information Administration (EIA) is due on Wednesday.
Oil markets have generally been supported by healthy demand as well as supply restraint led by the Organization of the Petroleum Exporting Countries (OPEC).
However, soaring U.S. crude production, which has jumped by a quarter since mid-2016 to 10.46 million barrels per day (bpd), is threatening to undermine OPEC’s efforts to tighten the market and prop up prices.
The United States late last year overtook top exporter Saudi Arabia as the world’s second biggest crude producer. Only Russia pumps more crude out of the ground, at almost 11 million bpd.
In a sign that oil supplies remain ample, China’s Sinopec, Asia’s largest refiner, plans to cut Saudi crude imports in May by 40 percent, instead buying from alternative sources, after Saudi Aramco set higher-than-expected prices, a company official said on Monday.
