NEW YORK: Oil prices were mixed on Tuesday, with U.S. crude settling higher before falling in post-settlement trading, and Brent slipping as investors prepared for a key meeting of the OPEC producer group next week.
Brent crude futures fell 58 cents to settle at $75.88 a barrel, while U.S. West Texas Intermediate crude futures climbed 26 cents to $66.36.
In post-settlement trading, however, WTI turned negative while Brent extended losses after data from the American Petroleum Institute showed a surprise build of 833,000 barrels in U.S. crude stockpiles. Analysts had expected a decline of 2.7 million barrels.
A stronger dollar and euro weakness was putting some pressure on Brent prices, said Phillip Streible, senior market strategist at RJO Futures. A strong dollar makes greenback-denominated oil more expensive for holders of other currencies.
“I was looking for an up day (for WTI) – in just a few weeks it had fallen from around $73 (a barrel) to $65, … and even for the window of seasonal decline, that’s a big move to go uncorrected,” said Walter Zimmerman, chief technical analyst at ICAP-TA.
The Organization of the Petroleum Exporting Countries released its monthly report on Tuesday, saying a high degree of uncertainty was hanging over the global oil market.
OPEC and other producing countries including Russia have cut oil output by 1.8 million barrels per day (bpd) since January 2017 in an effort to boost the market.
OPEC holds its next meeting on June 22-23, and is expected to decide on future supply policy.
With U.S. sanctions threatening to cut Iranian exports and the potential for more declines in Venezuelan production, Saudi Arabia and Russia have indicated they would be willing to make up for any supply shortfall.
U.S. production, meanwhile, is expected to rise by less than previously expected, to 11.76 million barrels per day next year, the U.S. Energy Information Administration said.
Still, OPEC said the outlook for the second half of 2018 is highly uncertain, even though the group’s figures show a global glut is gone.
On Monday, Iraq’s oil minister said producers should not be influenced by pressure to pump more oil.
Nonetheless, many analysts expect OPEC to decide to hike production.
“I feel that if they would like to be a responsible swing producer for the global oil market, based on their (demand) numbers, they should increase production by at least 1 million bpd from the current level,” PVM Oil Associates strategist Tamas Varga said.