Oil mixed as China's economy weakens, but OPEC cuts still support crude

By Henning Gloystein
SINGAPORE, May 28 (Reuters) - Oil prices were mixed on
Tuesday, pressured by a weakening economy, especially in China,
yet still supported by ongoing supply cuts from producer club
OPEC and U.S. sanctions against Iran and Venezuela.
Front-month Brent crude futures LCOc1 , the international
benchmark for oil prices, were at $69.90 at 0106 GMT. That was
21 cents, or 0.3%, below the last session's close, when Brent
rose 2.1%. U.S. West Texas Intermediate (WTI) crude futures CLc1 were
at $59.03 per barrel. They did not trade on Monday due to a
public holiday in the United States, but stood 40 cents, or
0.7%, higher than their last close on Friday.
Traders said Brent prices were under pressure from an
economic slowdown hitting China as a result of the ongoing trade
war with the United States, which is also expected to dent fuel
consumption. But preventing prices from falling further have been supply
cuts led by the Organization of the Petroleum Exporting
Countries (OPEC) since the start of the year.
OPEC and some allies including Russia are due to meet on
June 25 and 26 to discuss output policy going forward.
"Supply-side issues returned to the fore, with crude oil
prices rising strongly," ANZ bank said on Tuesday.
Beyond the OPEC cuts, U.S. sanctions on petroleum exports
from Iran and Venezuela have also tightened markets.
"Iran exports remain under pressure as U.S. sanctions bite.
This comes as OPEC appears to be heading towards extending the
current production cut agreement," it added.
Trump last year withdrew the United States from a 2015
international nuclear deal with Iran, and Washington is
ratcheting up sanctions seeking to end Iran's international
sales of crude oil and strangle its economy. Washington has also imposed sanctions on Venezuela's oil
exports, in a bid to topple the government under President
Nicolas Maduro there.