Yemisi Izuora
Oil prices edged higher on Tuesday after falling nearly 2 per cent in the previous session, but growing US production and expectations of higher Organization of Petroleum Exporting Countries, OPEC, supplies continue to weigh on sentiment.
Brent crude futures added 15 cents, or 0.2 per cent, to $75.44 a barrel after settling down 2 per cent at $75.29 a barrel on Monday, while the US West Texas Intermediate, WTI, crude was up 28 cents, or 0.4 per cent, at $65.03 a barrel. It finished the previous session 1.6 per cent lower at $64.75 a barrel.
“It’s all about supply, whether it’s OPEC raising output or US increasing production, all roads lead to higher global oil supplies, which is leaving oil traders shaking in their boots,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.
The Organization of the Petroleum Exporting Countries (Opec) is due to meet in Vienna on June 22 to decide whether the group and non-Opec members including Russia will raise production to ease concerns over potential supply shortfalls from Iran and Venezuela.
Over the weekend, OPEC and non-OPEC Arab oil ministers agreed on the need for continued cooperation to balance global supply, Kuwait’s state news agency KUNA reported.
Increasing US crude oil production has also put pressure on oil prices.
In March, US crude output rose to 10.47 million barrels per day, the highest on record, according to a monthly report by the Energy Information Administration (EIA).
The number of rigs drilling in the United States was also up by two in the week to June 1, bringing the total to 861, the most since 2015, General Electric Co’s Baker Hughes energy services said on Friday.
US crude stocks were forecast to fall about 2.5 million barrels on average in the week ended June 1, according to five analysts polled ahead of the reports.