Comment by Denys Peleshok, Head of Asia at CPT Markets

Oil prices continued to see some pressure after rising during the last few weeks and correcting during the last few trading sessions. Traders considered economic data releases and developments on the market that affected expectations over supply and demand levels.

The rise in oil prices has been driven by production expectations after Saudi Arabia and Russia announced output cuts for this summer. Supply concerns could continue to support an uptrend in the market over the medium term as traders could remain cautious in the face of potential new intervention from OPEC+ to balance prices.

At the same time, the reduction in supply levels could be alleviated to a certain extent as some Libyan output could return to the market after activity in some oil fields resumed.

However, demand concerns could remain the center of attention for traders and could create some uncertainty and fuel some volatility and price corrections. In this regard, the market reacted to Chinese economic data which continued to show a weaker-than-expected recovery.

With demand in focus, the market could strongly react later today to US economic data as traders expect data on industrial production as well as crude stockpile levels. This data could affect US demand expectations and impact oil prices to a certain extent.