Oil slips after Trump calls on OPEC to rein in prices
Oil inched down on Tuesday to extend losses of more than 3 percent from the previous session, easing after U.S. President Donald Trump called on OPEC to rein in its efforts to boost prices.
International Brent futures were at $64.66 a barrel at 0533 GMT, down 10 cents, or 0.2 percent, from their last close. Brent, which plunged 3.5 percent on Monday, touched its lowest since Feb. 14 on Tuesday at $64.32 a barrel.
U.S. West Texas Intermediate (WTI) crude futures were at $55.21 per barrel, down 27 cents, or 0.5 percent.
Analysts said the United States, the world’s biggest oil consumer, was keen to counter a recent rally in prices driven by major exporters trimming production. Brent prices gained 8.1 percent from Feb. 8 to Feb. 22.
Trump on Monday expressed concern about oil prices and repeated his previous calls on the Organization of the Petroleum Exporting Countries (OPEC) to keep prices steady.
“The timing was impeccable, catching many traders very long after a two-week rally,” said Jeffrey Halley, senior market analyst, OANDA.
“The oil markets have been the most optimistic on a U.S.-China trade deal over the last two weeks. As a result, they were probably the longest and therefore the most vulnerable to a headline-driven sell-off.”
Reuters commodity technical analyst Wang Tao said on Tuesday that U.S. crude may test support at $54.39 per barrel, a break below which could cause a loss to $53.18.
OPEC and some non-affiliated producers such as Russia agreed late last year to cut output by 1.2 million barrels per day (bpd) to prevent a large supply overhang from growing.
Analysts also noted that while Trump is attempting to ease prices lower, sanctions by the United States against oil exporters Iran and Venezuela have contributed to the recent gains and are providing a floor for prices.
But when Washington re-imposed sanctions against Iran’s oil exports in November, it granted waivers to eight of Tehran’s buyers to import some oil for 180 days, which ends in May this year.
“The sharp drop in oil prices is likely due to market jitters on potential waivers in U.S. sanctions on Iranian petroleum exports (in May),” said Benjamin Lu, commodities analyst at Singapore-based brokerage firm Phillip Futures.
“The effects of additional U.S. waivers on Iran will impede OPEC+ efforts to rebalance oil markets in 2019,” Lu added, saying oil prices continue to face headwinds from growing U.S. production and weaker global growth prospects.