Brent gains on supply concerns

The front-month ICE Brent contract has gained $0.11/bbl higher on the day from Thursday, to trade at $66.51/bbl at 09.00 GMT.

IMAGE: Oil barrels. Getty Images

Upward pressure:

Brent’s price edged higher on the back of supply concerns.

OPEC’s second largest oil producer Iraq is set to reduce its oil exports by about 100,000 b/d to an average of 3.2 million b/d in May, Bloomberg reports.

The news has supported Brent’s price as pressure from the Saudi Arabia-led coalition to adhere to production targets continues to grow.

Iraq pledged to lower its oil exports as "it faces pressure to adhere to its OPEC+ production target,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

Besides, OPEC+ announced last week that seven members will collectively reduce output by 4.6 million b/d through June 2026 under revised compensation plans to offset previous overproduction.

Downward pressure:

Brent’s price gains were capped following the long Easter weekend as escalating trade tensions between the US and China weighed on sentiments.

The US-China tariff battle has continued to intensify, after Beijing announced 125% tariff on US goods last week. China's latest tariff announcement follows US President Donald Trump's decision to hike duties on Chinese products to 145%, according to a Reuters report.

“[Oil] market participants took note of the worsening trade conflict between the US and China and continued recalibrated optimism over the two countries being able to resolve their trade conflict any time soon,” VANDA Insights’ founder and analyst Vandana Hari said.

By Aparupa Mazumder

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