Oil prices dipped after volatile trading due to mixed signals on US-China trade talks. WTI futures fell near $61 a barrel after President Trump accused China of violating trade terms and threatened tech restrictions, raising fears of a tariff war that could reduce oil demand. Losses eased when Trump showed willingness to talk with President Xi. Meanwhile, OPEC+ plans to increase output by over 411,000 barrels per day in July, fueling expectations of a supply glut.
Citigroup analysts note that the global oil market remains loose and is expected to loosen further due to rising non-OPEC supply and steady stock builds, though geopolitical risks from Russia and Iran provide some price support. Commodity traders have increased short positions in Brent to 91%, up from 70% in late May. However, WTI futures show near-term strength, with front-month contracts trading at the highest premium to next-month contracts since January.
Libya’s eastern government threatened to cut oil production by up to 600,000 barrels per day after a militia attacked the state oil company. Meanwhile, Canadian wildfires risk affecting 9% of the country’s crude output, supporting prices.
