Brent for October settlement lost as much as 48 cents, or 1 percent, to $48.75 a barrel on the London-based ICE Futures Europe exchange.
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U.S. West Texas Intermediate (WTI) crude futures rose to a high of $44.95 a barrel before dipping to $44.85 a barrel, still up 36 cents from their last close.
Meanwhile, oil prices were also supported by a weaker USA dollar, which made the dollar-denominated oil more attractive for holders of other currencies.
The kingdom boosted its monthly production by 30,000 barrels in July, and increased output from OPEC members like Iraq, Iran, and the United Arab Emirates further exasperated the supply glut.
The ministry said Russia’s delegation to OPEC “exchanged views on the current situation on the oil markets and the prognoses for its development”, as prices held above $45 a barrel early Tuesday.
A Reuters survey at the end of July showed OPEC’s oil output was likely to have reached its highest in recent history last month, led by increases in Iraq and as Nigeria managed to export additional crude despite militant attacks on oil installations. Prices gained 9.7 per cent the previous three sessions following comments by Saudi Arabia’s energy minister that it’s prepared to discuss stabilising the market.
“While it is tempting to dismiss the OPEC chatter as a non-factor meant to talk up prices, we are also resigning to a momentum shift in which our technical indicators are flashing green lights in favor of further crude price rallies of at least a couple of dollars a barrel”, said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.
“News of an imminent collapse in oil output from Venezuela also supported prices”, ANZ said. In other words, freezing production – at extremely high levels – wouldn’t really help fix an oversupplied market.
In response to a question if Saudi is drawing down stocks due to a rise of supply above production by 10.75 million barrel last month, the minister noted that there has been a modest stock drawdown last month, which is expected during this time of the year. U.S. crude stockpiles probably rose by 900,000 barrels through August 12, according to the median estimate in a survey before an Energy Information Administration report on Wednesday.
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An informal meeting of the world’s largest oil producing countries is scheduled for late September in Algeria, RT added.
