“Even with a freeze – which would still mean OPEC production is at record levels – we will still be in an oversupplied market”, said Matt Stanley, a fuel broker at Freight Investor Services (FIS) in Dubai.
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Gasoline supplies declined by 2.5 million barrels, surpassing forecasts of a 1.4 million barrel draw.
A move by the Fed’s policy-setting committee to raise interest rates will likely boost the dollar and make oil more expensive for holders of other currencies, denting demand and prices.
Cairo-International benchmark Brent crude oil futures were trading at about $45 per barrel on Tuesday.
But some analysts said that in the absence of any firm agreement, prices will continue to swing.
But prices have also swung from “buying on the dips” by investors anxious about OPEC production drops in the near future, Shelton said.
Oil prices edged higher by almost 2 percent on Monday after clashes erupted in Libya on Sunday, raising concerns that efforts to restart crude exports could be disrupted.
Some traders, however, said US crude stockpiles were still high and prices could come under pressure again.
Also supporting crude prices was speculation that OPEC and oil producers will agree to some sort of a production-freeze deal in talks in Algeria next week, and that the Federal Reserve will not hike United States interest rates in a policy decision due at 1800 GMT (11:30 p.m.in India).
Some market participants were puzzled by last week’s draw in USA crude when imports as a whole rose and refinery runs fell.
“Oil ministers may decide to hold an extraordinary meeting immediately”, he said.
Bouterfa said he was optimistic that participants would reach a consensus on how to stabilize the oil markets at the Algiers meeting of OPEC and non-OPEC producers on September 26-28.
Japan’s crude imports rose 0.5 per cent in August from the same month a year earlier, the Ministry of Finance said today, reaching 3.38 million barrels per day last month. The IEA reduced growth estimates for this year by 100,000 barrels a day to 1.3 million a day, citing a deceleration in China and India this quarter coupled with vanishing growth in developed economies.
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US gasoline futures settled up 2.5 percent at $1.3990 per gallon after data showed stocks of the motor fuel fell 3.2 million barrels nationwide, compared with analysts’ expectations for a 567,000-barrel drop.
