Oil prices declined by over 1 per cent on Friday as traders turned cautious ahead of a meeting by the Organisation of the Petroleum Exporting Countries and its allies (OPEC+) to decide the group’s output policy for June.
Brent crude futures went down by 84 cents or 1.4 per cent to $61.29 per barrel while the US West Texas Intermediate (WTI) crude futures tumbled by 95 cents or 1.6 per cent to settle at $58.29 a barrel.
An OPEC+ meeting featuring eight countries — Saudi Arabia, Russia, the UAE, Kuwait, Iraq, Algeria, Oman and Kazakhstan —to decide on their crude production targets for June was moved up to Saturday from the original plan of Monday, to allow for oil minister tied by their schedule to be present.
Members of the group are deliberating whether to make another accelerated oil output increase in June or stick with a smaller hike.
Saudi Arabia, the de facto leader of OPEC+, is unwilling to prop up oil markets with further supply cuts.
OPEC+ is currently cutting output by over 5 million barrels per day.
Traders remain cautious given the possibility of a de-escalation of the trade dispute between China and the US, after China on Friday said it was evaluating a proposal from the US to hold talks to address President Donald Trump’s tariffs.
Fears of an economic slowdown caused by a trade war between the U.S. and China have prompted market experts to lower demand growth expectations for this year.
President Trump on Thursday to impose secondary sanctions on buyers of Iranian oil also helped ease some of the pressure on oil prices, as it could tighten global supply.
The threat, which came after US talks with Iran over its nuclear programme were postponed, could also complicate trade talks with China, which is the world’s largest importer of Iran’s crude.
Also offering ease, US jobs data showed payrolls increased more than expected last month.