Crude oil prices are making further recovery attempts on Tuesday, after a steep decline late last week. Brent has regained the $71 figure and now targets the $72 barrier but it looks like the market lacks the upside momentum despite the prevailing bullish bias.
The mixed dynamics in crude prices is due to emerging concerns over OPEC production increase which coupled with rising output from the United States would offset most of the shortfall expected from US sanctions on Iran.
Saudi oil minister Khalid Al-Falih said today that his country won't exceed its OPEC+ deal output limit and also signaled that OPEC+ deal to the end of the year extension is possible. It sounds somehow reassuring but the big question remains Russia’s position on the deal, which makes traders nervious as well.
Against this backdrop, the upside potential for Brent will likely remain capped by the mentioned concerns, while in general, the fundamentals continue to point to a tightening market amid the supply cuts from Iran, Venezuela and Libya.