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Oil edges up on cautious optimism over Trump, Kim summit in Singapore

Reuters  |  SINGAPORE 

By Gloystein

(Reuters) - Oil prices edged up along with global markets on Tuesday on cautious optimism over the outcome of a summit between U.S. and North Korean leader in

But movements in crude markets were limited as traders said they were reluctant to take on large new positions ahead of a meeting between 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. 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 were also currently heavily driven by public policy events and statements.

Trump and Kim on Tuesday started a one-day summit in with the goal to narrow differences over how to end a nuclear standoff on the

"This week is all about global developments ... And today marks the potentially momentous meeting between and North Korean leader in Singapore," said Shannon Rivkin, at Australia's

Global markets edged up as the highly anticipated U.S.-summit got underway in Singapore amid expressions of goodwill.

"Any positive outcome could be good for markets," Rivkin added.

In oil market fundamentals, however, not all things point to higher prices, with output from the three biggest producers, Russia, the and 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.

"The deluge of U.S. crude production continues to hold the top-side in check," said Stephen Innes, at

Now, top exporter - which has so far led OPEC's efforts to withhold supplies - is also showing signs of upping production.

has told OPEC that it raised to a little more than 10 million bpd in May, up from 9.9 million bpd in April.

"This fits with the theory that the Saudis and Russians are subtly moving toward a change to the agreement at this month's meeting," McKenna said.

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.

"Expect more of the same whippy markets driven by rumours and innuendo ahead of June 22 OPEC meeting," Innes said.

(Reporting by Gloystein; Editing by and Joseph Radford)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, June 12 2018. 08:13 IST