Oil prices dipped on Tuesday, easing after strong gains in the previous session when hopes that trade disputes between the United States and China could be resolved buoyed global markets.
Despite a softening of trade concerns, oil markets still face an abundance of supplies that puts pressure on producers to keep their prices competitive in order not to lose market share.
U.S. WTI crude futures
Brent crude futures
The dips came after a more than 2 percent rally on Monday during European and American trade hours.
"Oil prices rose sharply (on Monday) as a weaker U.S.-dollar and easing concerns about the trade war saw investor appetite return," ANZ bank said.
"Reports that back-channel talks over the trade dispute between the U.S. and China are ongoing helped soothe investor angst," it added.
Concerns of a prolonged trade dispute between the world`s two biggest economies and uncertainty over the supply and demand balance of global oil markets have resulted in volatile yet range-bound recent trading.
"Oil prices remain rangebound with WTI oil right in the middle of the $60-$65 per barrel range that has largely held since January of this year," said William O`Loughlin, investment analyst at Australia`s Rivkin Securities.
"U.S. oil inventories had been rising for the past couple of months but the data released last week showed an unexpected draw. This week`s data may be crucial for determining the direction of WTI," he added.
The American Petroleum Institute is due to publish oil storage data later on Tuesday while official data from the U.S. Energy Information Administration (EIA) is due on Wednesday.
Oil markets have generally been supported by healthy demand as well as supply restraint led by the Organization of the Petroleum Exporting Countries (OPEC).
However, soaring U.S. crude production
The United States late last year overtook top exporter Saudi Arabia as the world`s second biggest crude producer. Only Russia pumps more crude out of the ground, at almost 11 million bpd.
In a sign that oil supplies remain ample, China`s Sinopec , Asia`s largest refiner, plans to cut Saudi crude imports in May by 40 percent, instead buying from alternative sources, after Saudi Aramco set higher-than-expected prices, a company official said on Monday.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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