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Brent crude futures for May dropped 97 cents, or 1.12%, to
$85.28 a barrel by 0929 GMT while the more actively traded June
contract fell by 92 cents, or 1.07%, to $84.71. The May contract
expires on Thursday.
U.S. West Texas Intermediate (WTI) crude futures for May
delivery fell 93 cents, or 1.14%, to $80.69.
Prices have retreated since climbing to their highest since
October last week and remain about 3% above the average closing
price in the first week of March.
A sharp rise in U.S. crude inventories and expectations for
potential inaction by OPEC+ next week prompted further
"unwinding" in oil prices as profit-taking accelerates after the
mid-March rally, said IG market strategist Jun Rong Yeap.
U.S. crude oil inventories rose by 9.3 million barrels in the
week ended March 22, said market sources citing American
Petroleum Institute figures on Tuesday. Distillate inventories
rose by 531,000 barrels, but gasoline stocks dropped by 4.4
million barrels.
Official government data will be published on Wednesday at 10:30
a.m. EDT (1430 GMT).
The Organization of the Petroleum Exporting Countries (OPEC) and
allies led by Russia, together known as OPEC+, are unlikely to
make any oil output policy changes until a full ministerial
gathering in June, three OPEC+ sources told Reuters ahead of
next week's meeting to review the market and members'
implementation of output cuts.
OPEC+ this month agreed to extend output cuts of about 2.2
million barrels per day (bpd) to the end of June, though Russia
and Iraq have had to go to extra lengths to tackle
over-production. Those struggles have called into question the
group's ability to comply with cuts, with OPEC having exceeded
its targets by 190,000 bpd in February, a Reuters survey showed.
Traders are "watching OPEC members for any sign they may be
altering their stance on production quotas," ANZ analysts
said in a report on Wednesday.
Meanwhile, leading German economic institutes said they expect
the country's economy to grow by 0.1% in 2024, down from a
previous forecast of 1.3%, in a grim sign for Europe's economic
powerhouse.
(Reporting by Paul Carsten in London, Emily Chow in Singapore
and Andrew Hayley in BeijingEditing by David Goodman)
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