Oil falls ahead of G20 and Opec meetings
Opec to meet on July 1-2 in Vienna to decide whether to extend their supply cuts as leaders of G20 countries gather in Japan
Seoul — Oil prices eased on Friday in a cautious market, as traders eyed a scheduled meeting between US President Donald Trump and Chinese President Xi Jinping at the G20 summit and next week’s Organisation of the Petroleum Exporting Countries (Opec) meeting.
Brent crude futures were down 39c, or 0.6%, at $66.16 per barrel by 2.45am GMT.
US West Texas Intermediate (WTI) crude futures were down 40c, or 0.7%, at $59.03 a barrel.
The leaders of the G20 countries meet on Friday and Saturday in Osaka, Japan, but the most anticipated meeting is between Trump and Xi on Saturday.
A trade dispute between the world’s two biggest economies has weighed on oil prices, fanning fears that slowing economic growth could dent demand for the commodity.
“While there are no expectations of a truce between the two parties, it will set the scene for the Opec meeting a couple of days later,” ANZ Bank said in a note.
Trump said on Wednesday a trade deal with Chinese President Xi was possible this weekend, but he is prepared to impose US tariffs on most remaining Chinese imports should the two countries disagree.
“Even if US-China trade talks turn positive, we think Opec will extend the current production cuts until the end of the year. However, deeper cuts look unlikely, given the rising supply issues,” ANZ said.
Opec and some non-members including Russia, known as Opec+, will hold meetings on July 1-2 in Vienna to decide whether to extend their supply cuts.
“The market sentiment is that Opec+ will agree to extend cuts, but after all what matters is how deep the cuts will be and how much Saudi Arabia and Russia will curb,” said Kim Kwang-rae, a commodity analyst at Samsung Futures in Seoul.
Opec+ members agreed to curb oil output by 1.2-million barrels per day from January 1.
Russian President Vladimir Putin said in an interview with the Financial Times on Thursday that the Opec-led supply cut helped stablise oil markets and the future of the output deal was expected to be on the agenda at the G20 summit.
Tensions between the US and Iran have also been keeping markets on edge.
A week after US President Donald Trump called off air strikes on Iran at the last minute, the prospect that Tehran could soon violate its nuclear commitments has created additional diplomatic urgency to find a way out of the crisis.