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Oil prices dip near $32 a barrel

Amidst fresh concerns about excess supply, following an American Petroleum Institute report which signaled that crude inventories swelled for the first time in three weeks, oil prices slid to near US$ 32 a barrel. Simultaneously, futures fell about 2% in New York.

The market has started showing signs of recovery, albeit oil is still up about 70% this month. These include supply curbs to trim excess supply and pockets of demand emerged after the easing of lockdown restrictions.  Refiners across Asia have reportedly begun buying distressed cargoes.

According to experts, however, the prices might remain volatile in the short-term as the US-China tension continues to mount. Relations between the two superpowers became even more sour after the U.S. said it could no longer certify Hong Kong’s autonomy from China.

Further, Howie Lee, an economist at Oversea Chinese Banking Corp, explains “Uncertainty is still lingering around OPEC+ cuts going forward, adding bearishness to oil prices.” While earlier Moscow signaled that it wanted to scale back supply cuts pledged under the OPEC+ agreement from July, later Russian President Vladimir Putin and Saudi Arabia’s Mohammed bin Salman reiterated their cooperation to the deal ahead of a June 9-10 meeting.