Oil prices steadied yesterday after slipping prices on concerns that Saudi Arabia and Russia will pump more crude in response to falling global crude inventories and rising consumer prices.
Saudi Arabia and Russia have discussed raising the Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC oil production by one million barrels per day (bpd) to counter potential supply shortfalls from Venezuela and Iran.
Brent crude was up one cent at $75.40 a barrel.
U.S. West Texas Intermediate crude was up 10 cents, at $66.83 a barrel.
“OPEC has over-delivered on supply cuts in the past six months. There is … scope for an increase in OPEC output,” Harry Tchilinguirian, global head of commodity market strategy at French bank BNP Paribas, said in a note to clients.
OPEC-led supply curbs have largely cleared an inventory surplus in industrialised countries, and stocks continue to decline.
The oil cartel is due to meet in Vienna on June 22.
Credit Suisse analysts two days ago said even if Russia and OPEC producers raise output, they would likely only add an additional 500,000 bpd.
The move would leave inventories in the most developed countries short of the five-year average by the end of 2018.
Falling share prices and a stronger U.S. dollar index also weighed on oil prices.
A stronger dollar makes greenback-denominated commodities more expensive for holders of other currencies.