Brent crude futures <LCOc1> were down 7 cents at $76.67 a barrel
by 1107 GMT, while U.S. West Texas Intermediate (WTI) crude
futures <CLc1> were up 27 cents at $66.91.
"At OPEC’s meeting in a good week’s time, Saudi Arabia
apparently plans to make several proposals that all boil down to
increasing production on a one-off or gradual basis by between
500,000 and 1 million barrels per day," Commerzbank analysts
said in a note.
"Iran has already signaled that it will resist any such attempts
and blames the U.S. for the price rise. According to sources
close to OPEC, Venezuela and Iraq are also not in favor of
raising production."
The Organization of the Petroleum Exporting Countries meets on
June 22 in Vienna to discuss its own supply policy and then
again on June 23 with rival producers such as Russia and Oman.
For the last month, oil prices have successively marked lower
intraday highs and lows, indicating that traders and investors
are not quite as confident in the outlook for the supply/demand
balance, especially given the steep rise in U.S. crude
production and the splintering within OPEC.
U.S. crude output has risen almost 30 percent in the last two
years to 10.9 million bpd. It is now close to that of top global
producer Russia, which churned out 11.1 million bpd in the first
two weeks of June, and above top exporter Saudi Arabia, which
produced slightly more than 10 million bpd.
But the rising output was met by strong demand, which traders
said prevented prices from falling further.
U.S. consumption of gasoline rose to a record 9.88 million bpd
last week, according to government figures.
U.S. crude inventories <C-STK-T-EIA> fell by 4.1 million
barrels, to 432.4 million barrels.
WORLD CUP MEET
The surge in U.S. output puts pressure on other producers, which
are losing market share.
Russian and Saudi production has been held back voluntarily
since 2017, when OPEC, together with a number of non-OPEC
producers, started supply cuts of 1.8 million bpd to prop up
prices.
With Brent prices up by around 180 percent from their 2016 lows
and demand strong, OPEC and Russia may soon end their supply
cuts.
OPEC's effective leader Saudi Arabia and Russia will also have
the chance to talk before the Vienna meeting.
Russia and Saudi Arabia are set to open the football World Cup
tournament, which starts in Russia on Thursday.
"The topic will surely come up between President (Vladimir)
Putin and the Saudi Crown Prince Mohammad bin Salman as they
watch their countries’ teams in today’s opening game of the
football World Cup together in Moscow’s Luzhniki stadium," PVM
Oil Associates strategist Tamas Varga said.
(Reporting by Amanda Cooper; Editing by Adrian Croft and Dale
Hudson)
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