Crude oil futures were lower during mid-morning trade in Asia Monday amid the recent comments made by US President Donald Trump on global oil supply while market participants were looking ahead for fresh price cues.
At 10:30 am Singapore time (0230 GMT), the June ICE Brent crude oil futures were down 31 cents/b (0.43%) from Friday's settle to $71.84/b, while the NYMEX June light sweet crude contract moved 35 cents/b (0.55%) lower to $62.95/b.
Trump on Friday tweeted that he spoke with the OPEC producers and that he had asked to increase supply to reduce crude prices.
"Spoke to Saudi Arabia and others about increasing oil flow. All are in agreement," Trump tweeted.
"Oil prices took a hit after President Trump indicated he had spoken with Saudi Arabia about reducing the impact of lower Iranian oil exports by increasing flows elsewhere, " said ANZ analysts in a note Monday.
Trump has tweeted about oil supply or prices 14 times since becoming president. While the messages have caused sharp same-day price drops, the price impact disappears quickly, according to an analysis by Kensho Analytics, a machine-learning unit of S&P Global.
"Trump's claims that he "called up" OPEC about oil left little to read between the lines and oil collapsed instinctively, " said Vishnu Varathan, senior economist at Mizuho Bank.
This comes at a time when the waivers on Iranian crude exports have been cancelled by the US Administration thereby resulting in lesser global supply of crude.
A top Iranian military official repeated a threat to shut the Strait of Hormuz if the country's oil shipments are blocked by US sanctions, at the same time an official in parliament warned crude prices could top $100 a barrel, according to reports Sunday by state television IRIB news agency.
"If our oil is not to pass the Strait of Hormuz, oil of others will certainly not pass through this strait either," Mohammad Bagher, chief of staff of the armed forces, said.
The 21-mile Strait of Hormuz at the mouth of the Persian Gulf handles roughly 40% of global crude trade.
"The underlying bullish fundamentals have not really changed. There is still fear that Saudi Arabia and the UAE will move slowly to replace lost Iranian barrels. There are still supply risk factors from Venezuela, Libya, and Nigeria," said Price Futures Group senior market analyst Phil Flynn.
Meanwhile, market participants would be looking ahead for fresh price cues for weekly US inventory data to provide direction, analysts noted.
