On the New York Mercantile Exchange, WTI crude for September delivery eased 0.56% to $42.78 a barrel.
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Oil prices climbed on Monday after the oil cartel OPEC said it would hold an informal meeting next month and predicted that current bear market is only temporary.
The latest drop in prices won’t last, Al Sada said. Members constantly discuss ways to stabilize the market, he said.
“It would appear that OPEC calls for restraint would be inevitable”, Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates said, citing concerns over rising USA oil rigs and weakening energy demand. “While a deal is highly unlikely to eventuate, the fact that it is even being mentioned shows how much difficulty the past month’s renewed sell-off was causing many struggling OPEC members”, Angus Nicholson, a market analyst at IG in Melbourne, Australia, said in a daily commentary.
The Energy Information Administration last week posted a rise of 1.41 million barrels in United States crude stockpiles over the week to July 29, while analysts had forecast a drop. Brent, the global benchmark, gained 68 cents, or 1.5%, to $44.95 a barrel on ICE Futures Europe.
Al-Sada added that prices have have experienced “steady improvement” since February following “a decline in crude oil production, supply outages and a decrease in oil inventories, while global demand for oil improved”. OPEC’s biggest producers have also been pumping near record high levels. According to reports, OPEC’s members-Venezuela, Kuwait, and Ecuador-are trying to materialize fresh output freeze talks among OPEC members.
Alexander Novak, Russian Energy Minister, said he sees no grounds for talks on freezing output, but is open to negotiating.
OPEC sees recent oil price declines and current market volatility as “only temporary” and due to weak refinery margins, an inventory overhang and the impact of Britain’s decision to leave the European Union on the crude oil futures market. OPEC members always meant to discuss the market when they gather for the International Energy Forum next month, but there are no plans to renew the failed push for an output freeze, according to two delegates from the group.
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Total U.S. crude inventories were expected to fall by 1 million barrels in weekly reports, although market intelligence firm Genscape has reported a rise of more than 307,000 barrels at the Cushing, Oklahoma U.S. crude delivery hub, traders said.
