Oil slid Tuesday ahead of a meeting among OPEC and other supply-curbing countries later this week, where oil ministers are expected to ease output cuts, and amid an escalating trade fight between the US and China.
- Oil was down more than 2% Tuesday.
- OPEC is expected to roll back supply cuts at a meeting later this week.
- China has threatened to impose tariffs on US crude.
Oil slid Tuesday ahead of a meeting among OPEC and other supply-curbing countries later this week, where oil ministers are expected to ease output cuts, and amid an escalating trade fight between the US and China.
West Texas Intermediate was down 2.14% to $64.42 per barrel at 11 a.m. ET. Brent, the international benchmark, shed more than a dollar to $74.48 a barrel. Crude has been selling off over the last week amid expectations for higher output.
Saudi Arabia, the unofficial leader of OPEC, and Russia, which leads non-OPEC countries in coordinating supply cuts, have been pushing for a rollback of production amid falling output in several member countries. The cartel has also reportedly faced pressure from the US to begin easing output constraints.
Jack Allardyce, an oil and gas analyst at Cantor Fitzgerald Europe, thinks the decision could push Brent below $70.
"In terms of the production increase, we could see this knocking $5 a barrel off Brent and perhaps squeezing the WTI discount a little." Allardyce wrote in an email. "However, taking into account the recent inventory draws (suggesting that the market actually requires a bit more supply) we wouldn’t expect too much more than that."
An escalating trade fight between the US and China also seems to be weighing on prices. After President Donald Trump said his administration could impose tariffs on an additional $200 billion worth of Chinese goods Monday, Beijing threatened to strike back with tariffs on a range of US products, including crude imports.
"A lack of appetite for risk amid the US-China trade dispute has resulted in oil prices depreciating today," said Lukman Otunuga, an analyst at FXTM.
Oil ministers from OPEC and other supply-cutting countries meet in Vienna on June 22 and 23.