Trump Sways Both Bearish And Bullish Sentiment As Oil Declines

Meanwhile, Gulf of Mexico output is expected to surge under Trump: File Image/Pixabay

Oil prices on Tuesday fell by over 1 percent based on the familiar one-two punch of supply glut fears and waning demand 

As of 1725 GMT, Brent declined 90 cents, or 1.4 percent, at $63.86 per barrel; West Texas Intermediate fell 90 cents, or around 1.5 percent, to $60.63 per barrel.

Iran and the U.S. completing a fifth round of nuclear talks in Rome led analysts to be cautiously optimistic about a peace deal being reached, even though signs of progress were limited; and this in turn resulted in worries over sanctions being lifted and Iranian barrels flooding the global market.

Dennis Kissler, senior vice president of trading at BOK Financial, added, "OPEC+ also meets next week where they will likely agree on further output increases, which, if it occurs, will be a major near-term headwind for crude."

In assessing possible strategies of the Organization of the Petroleum Exporting Countries, Ole Hvalbye, an analyst at SEB, remarked, "Crude prices appear to be consolidating around the $65 level as markets await the upcoming OPEC+ meeting.

"We assign a high probability to another sizeable output increase of 411,000 barrels per day [bpd]."

Tempering Tuesday's analytical pessimism somewhat was U.S. president Donald Trump's decision to extend trade talks with the European Union, until July 9; Trump also said he's considering new sanctions against Russia after its large drone attack on Ukraine – a move that may inspire more bullish trading if enacted.

In other oil news on Tuesday, Trump's commitment to expediting oil and gas project approvals on federal lands was credited for an anticipated rise in Gulf of Mexico output from 1.8 million bpd to 2.4 million bpd by 2027.

In addition to promising geology, deepwater drilling is said to be benefiting from technological advances such as those employed by Chevron's Anchor project, which recently began an industry-first production at record-breaking pressures of 20,000 pounds per square inch.

Also on Tuesday, and as a campaign to raise funds, Saudi Arabia's state-owned Saudi Aramco was set to issue and three-part bond in U.S. dollars of at least $500 million; Aramco is also reportedly  exploring asset sales to boost fund availability.