Saudi Arabia and Russia have a deal to extend the cuts, but a
meeting on Thursday rather than later in June might not happen,
sources said. Oil had earlier dropped after Bloomberg reported
the Thursday meeting was in doubt.
"Prices were firm so far this week on the news that the meeting
was earlier," said Olivier Jakob, oil analyst at Petromatrix.
"The retracement today is definitely due to the latest headlines
on OPEC."
Brent crude futures for August were down 73 cents, or 1.8%, at
$38.84 by 1150 GMT, having earlier touched their highest since
March 6 at $40.53. West Texas Intermediate (WTI) crude for July
fell 79 cents, or 2.2%, to $36.02.
Oil had been lifted earlier in the day by the American Petroleum
Institute's report on Tuesday that U.S. crude inventories fell
by 483,000 barrels. The government's official supply report is
due later on Wednesday. [EIA/S]
Both benchmarks have surged in recent weeks, with Brent more
than doubling after hitting a 21-year low below $16 in April,
when U.S. crude turned negative.
The OPEC+ group, comprising the Organization of the Petroleum
Exporting Countries and allies including Russia, is cutting
output by 9.7 million barrels per day (bpd) - about 10% of
global output before the coronavirus crisis - in May and June to
support prices.
Encouraged by signs of recovery in the market, OPEC+ is
considering extending the current level of cut beyond June.
"When you have Brent approaching $40, it is a good sign," one
OPEC delegate said. "We are on the right track."
Pointing to demand recovery, the services sector in China, the
world's second-biggest oil consumer, returned to growth last
month, a survey showed.
(Additional reporting by Aaron Sheldrick; Editing by David
Goodman and Louise Heavens)
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