Oil Prices Gain, But Expectations of Higher OPEC Supplies Weigh On Sentiment

Investing.com – Oil prices climbed on Tuesday despite growing U.S. production and expectations of higher OPEC supplies.

 for July delivery were trading at $65.14 a barrel at 12:10AM ET (04:10 GMT), up 0.60%. for August delivery, traded in London, were also up 0.36% at $75.56 per barrel.

for September delivery were down 1.3% at 464.5 yuan per barrel on Monday at 11:10PM ET (03:10 GMT).

The Organization of the Petroleum Exporting Countries (OPEC) will meet on June 22 in Vienna to discuss with non-OPEC members including Russia whether they would raise production. The group is expected to agree to raise output amid concerns over Iranian and Venezuelan supply, according to reports last month.

The news was cited as headwind for oil price, which fell nearly 2% in the previous session.

“It’s all about supply, whether it’s OPEC raising output or U.S. 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.

Meanwhile, increasing U.S. crude oil production has also put pressure on oil prices, as a monthly report by the Energy Information Administration (EIA) showed crude output in March rose to 10.5 million barrels per day, its highest on record.

“We are breaking key levels of support now,” said Phillip Streible, analyst at RJO Futures in Chicago. “Once we started taking out $65.50 or so, it really started to accelerate. People are not really believing that the rally will continue,” he said.

Looking ahead, the industry group American Petroleum Institute (API) is due to release its data for last week’s U.S. crude oil inventories at 4:30PM ET (2030 GMT) on Tuesday, and the EIA report is scheduled at 10:30AM ET (1430 GMT) on Wednesday.

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