Crude fell for a fifth straight day as the market weighs the prospects of rising production from Saudi Arabia and Russia.
Futures fell 1.7 percent in New York to their lowest level in six weeks. Saudi Arabia and Russia last week signaled they may restore some of the output they’ve curbed since late 2016 as they sought to drain a global glut. Now the market is awaiting a meeting of OPEC and its partners in Vienna set for late June to find out if those limits will remain.
“Clearly, the commentary from Russia and Saudi Arabia popped the bubble,” said John Kilduff, a partner at Again Capital LLC in New York. “There’s some legitimate skepticism about whether or not they’ll follow through. There is going to be nervousness right up until next month’s meeting.”
Talk of rising output from the world’s top two oil exporters wiped out this month’s rally in WTI and nearly erased Brent’s, which had been fueled by concerns that supplies from Iran and Venezuela will shrink. Yet, as questions swirl around the June meeting, OPEC and its allied producers concluded that the crude market re-balanced last month.
West Texas Intermediate for July delivery dropped $1.15 to settle at $66.73 a barrel on the New York Mercantile Exchange. Futures’ fifth straight session of declines is the longest such stretch since February. There was no settlement Monday for WTI because of the U.S. Memorial Day holiday, and all trades will be booked Tuesday.
WTI closed below a key technical level Tuesday, it’s 50-day moving average. This tends to be viewed as a bearish signal.
Brent futures for July settlement rose 9 cents to end the session at $75.39 a barrel on the London-based ICE Futures Europe exchange after earlier falling as much as 1 percent. The global benchmark traded at a $8.66 premium to WTI for delivery the same month.
Energy ministers from Saudi Arabia, the United Arab Emirates and Kuwait plan to meet on Saturday to discuss OPEC matters, according to people with direct knowledge of the matter. Oman’s Oil Minister Mohammed Al Rumhi may join, they said.
“I’m guessing that such a meeting would lead to some sort of practical applications of production increases,” said Thomas Finlon, director of Energy Analytics Group LLC in Wellington, Florida. Meanwhile, June’s OPEC meeting “is around the corner,” he said.