The past week was one of the weakest for crude markets this year – virtually everything combined together to create a highly powerful downward momentum. The oil market worries about the state of global trade were aggravated by the nearing prospect of Chinese retaliatory tariffs entering into vigor on June 01, whilst President Trump threatened Mexico with a set of new restrictive measures, adding to the overwhelmingly negative market sentiment. Add to this Russia’s alleged reluctance to extend the OPEC+ production cuts as the country is waking up from its spring field maintenance season and you get a sense of why crude futures fell to their lowest since February 2019.
The overall market sentiment was eased somewhat Tuesday afternoon by the prospect of China and the US assuaging the tonality of mutual denunciations, as well as hopes that the Federal Reserve may cut interest rates, bringing global benchmark Brent prices in the 61.8-62 USD per barrel interval, whilst WTI traded around 53-53.2 USD per barrel.
1. Saudi Aramco Hikes Asian Prices, Drops Rest
- The Saudi state oil company Saudi Aramco hiked all its Asia-bound July-loading cargoes to unprecedented levels, riding high on the wave of crude dearth in Asia.
- The Arab Light OSP at +2.7 USD per barrel against the Oman/Dubai average is the highest in more than 5 years, whilst the July OSPs for Arab Heavy and Medium are the highest in more than 7 years.