WTI crude futures were little changed around $101 per barrel on Thursday, taking a breather after their recent rally as investors turned their attention to the upcoming meeting between US President Donald Trump and Chinese President Xi Jinping. Markets expect the talks to focus primarily on trade rather than on tensions related to the Iran conflict, even as Washington has recently ramped up pressure on Tehran by threatening banks and introducing new sanctions on entities involved in shipping Iranian oil to China, the country’s largest crude buyer.
At the same time, the US Energy Information Administration reported that crude and fuel shipments through the Strait of Hormuz fell by nearly 6 million barrels per day in the first quarter, following the outbreak of conflict in the Middle East in late February. The International Energy Agency has also cautioned that the global oil market is likely to remain significantly undersupplied until October, even if the conflict ends next month. Adding to supply concerns, Saudi Arabia informed OPEC that its oil production has dropped to its lowest level since 1990.
