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Oil Slumps As Traders Test OPEC Resolve Ahead Of June Meeting

  • Crude oil has slumped today, first moving lower after Russia suggested OPEC are unlikely to adjust targets at the upcoming Jun 3-4 meeting according to Deputy Prime Minister Novak and with an added headwind from a steadily appreciating US dollar.
  • That said, JP Morgan joins other banks in stating that OPEC+ is ‘making good on its promise’ to cut supplies based on its voluntary cuts announced April 2.
  • Separately, a volatile tanker market is making physical traders increasingly cautious about buying cargoes according to Bloomberg as US crude deliveries to Europe has seen daily tanker earnings swing between $21k-$88k in the last month.
  • WTI is -3.4% at $71.79 off a low of $70.98 that moved closer to support at $69.39 (May 15 low). In contrast to the day’s sizeable downward pressure, the day’s most active strikes for the CLN3 have been at $85/bbl and $80/bbl strikes.
  • Brent is -2.9% at $76.11 off a low of $75.10 vs support at $73.49 (May 15 low).
  • Gold is -0.7% at $1943.74 off a post strong US data low of $1939.39 that moved closer to testing $1934.3 (Mar 22 low).

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