Oil prices edged higher on Wednesday, as investors shift their focus on the latest US crude inventory data, after concerns over Saudi Arabia and Russia’s plans to raise production weighed down on the crude earlier in the session.
International benchmark Brent futures for the August delivery was up by 0.2 percent to $75.67 per barrel. Brent has lost 7 percent from its 2014 highs above $80 per barrel last week.
US West Texas Intermediate (WTI) crude futures for the July contract gained 0.07 percent to $66.78 per barrel.
Oil prices slipped nearly 2 percent on Tuesday, as traders feared Saudi Arabia and Russia’s plan to produce more crude to tackle a potential shortage in supply.
Investors are now anticipating figures on US commercial crude supplies to assess the strength of demand in the world’s largest oil consumer.
The American Petroleum Institute (API) is due to release its weekly report later in the day, while official US crude inventory data from the Energy Information Administration (EIA) will be published on Thursday, amid forecast of an oil supply gain of 2.2 million barrels.
Saudi Arabia and Russia Discuss Raising Oil Output
Saudi Arabia, de-facto leader of the Organization of the Petroleum Exporting Countries (OPEC), and top producer Russia have talked about increasing OPEC and non-OPEC oil output by 1 million barrels per day (bpd) in the second half of the year to offset possible supply shortage from Venezuela and Iran.
The plan left oil market bulls seeking for protection at levels lower than the current futures price in case OPEC carries out a swift boost in production.
The discussion, along with reports of a rise in US crude supplies has also put crude oil futures under pressure last week. US production has grown ceaselessly by more than a quarter in the past two years to 10.73 million bpd, bringing it increasingly closer to beat Russia’s output of 11 million bpd.
Iran, meanwhile, is expected to prompt deficits later this year, when the trade sanctions are implemented. The country produces 4 percent of global oil supplies
The ongoing economic crisis of food shortages and a much higher inflation in Venezuela has also left the country’s output at its lowest level in ten years. In recent months, production in the Latin American state has fallen to about 1.4 million bpd or almost 40 percent since 2015.
OPEC is set to meet in Vienna on June 22 to discuss about how they will deal with the shortfalls, which might mean reversing the deal to restrict oil production that OPEC and non-OPEC producers headed by Russia established in the previous year, in an effort to lift prices and solve the supply gut.
Some analysts have expressed caution towards the plan, as the details have yet to be specified.
An energy sector research firm said the nature and magnitude of this effort, if it happens, is not going to be straightforward and that clarity could take some time to materialize, but there is an outside chance that further information will be known by the end of the week.