Crude oil futures saw slight gains on Friday morning, but they are still set to close the week lower, primarily due to concerns about rising oil supplies from OPEC+ and ongoing uncertainties related to the US-China trade war.
At 9:53 am on Friday, June Brent crude oil futures were trading at $66.98, up by 0.65%, while June WTI (West Texas Intermediate) crude futures were at $63.23, up by 0.70%. On the Multi Commodity Exchange (MCX), May crude oil futures were priced at ₹5,401, up by 0.39% from the previous close, and June futures were trading at ₹5,364, also up by 0.39%.
Geopolitical Tensions Support Oil Prices
On Friday morning, oil prices received some support from the escalating tensions between Russia and Ukraine. Reports indicated that Russia launched missile and drone strikes on Kyiv, Ukraine’s capital, on Thursday. The ongoing conflict, particularly in the context of Russia’s actions, has raised concerns about the potential impact on global oil supplies.
In response to the attacks, US President Donald Trump criticized Russia’s strikes, calling them unnecessary and poorly timed. He also voiced his displeasure over Ukrainian President Zelenskyy’s statements regarding Crimea, which he believed could hinder peace negotiations with Russia. Despite the escalating tensions, there are reports suggesting progress in peace talks between the US and Russia, leading to market hopes that a ceasefire could ultimately improve crude oil supply stability.
OPEC+ Supply Concerns Weigh on Prices
On the other hand, bearish sentiments have also been affecting oil prices. Ongoing reports have indicated that some OPEC+ members are considering an increase in crude oil production for the second consecutive month in June, which could contribute to higher global oil supply levels. The move could undermine price support from geopolitical tensions if demand does not keep pace with the potential increase in supply.
US-China Trade War Impact
Additionally, the unresolved trade war between the US and China continues to put pressure on global oil prices. Both nations are major consumers of crude oil, and any escalation in trade tensions could negatively affect global economic growth and, in turn, crude oil demand. These factors have been keeping oil prices volatile, and market participants remain cautious about any further escalation.
Natural Gas and Other Commodities
Meanwhile, May natural gas futures were trading at ₹265.20 on MCX, up by 0.65% from the previous close. Other commodities saw mixed performances as well, with May jeera futures dropping by 1.11% to ₹22,750 and May turmeric futures decreasing by 0.63% to ₹14,456.
Outlook for Crude Oil Despite the geopolitical risks supporting oil prices, the outlook for crude oil remains uncertain due to the potential increase in production by OPEC+ and the ongoing tensions between the US and China. The market will continue to monitor these developments closely, as they could influence supply-demand dynamics and price movements in the weeks ahead.
