Brent above $75 as market settles

Futures in New York were little changed, though still almost $6 below last week’s high

Brent crude traded above $75 (Dh275) per barrel, while West Texas Intermediate (WTI) steadied near $67 a barrel as markets regained some composure following renewed trade tensions between the US and China, political turmoil in Europe and simmering concerns that Opec may ease its output curbs.

Futures in New York were little changed, though still almost $6 below last week’s high. China said it would respond accordingly to US President Donald Trump’s plan to impose tariffs on $50 billion of Chinese imports. Encouraging economic data in Europe blunted panic related to Italy’s political crisis, which on Tuesday helped boost a gauge of oil market volatility to its highest level since February.

The market turmoil has weighed on oil, erasing all of the gains in WTI crude prices this month as the prospect of rising output from Saudi Arabia and Russia emerged ahead of a June meeting between the Organisation of Petroleum Exporting Countries and its allies. The next clue about the state of the market’s fundamentals will come from industry data on US inventories, due yesterday.

“There was a shock both with Russia and Saudi Arabia scaling back the cuts, together with Italy on top, that has been a nasty medicine for the oil market,” said Bjarne Schieldrop, chief commodities analyst at SEB AB in Oslo. “My thinking is that there is still some more to go on this oil correction.”

WTI for July delivery, which rose as high as $67.15 a barrel yesterday, traded at $66.76 on the New York Mercantile Exchange at 11.56am London time. The contract settled $1.15 lower at $66.73 in the previous session.

Brent futures for July settlement traded 21 cents higher at $75.60 after losing as much as 0.8 per cent earlier on the London-based ICE Futures Europe exchange. The contract on Tuesday rose 9 cents to $75.37. The global benchmark crude traded $8.84 more than WTI.