Cuts in OPEC, US crude inventories in the crosshairs

Oil prices fell by more than 2% on Wednesday, penalized by a weaker demand outlook and an increase in US crude inventories, despite expectations of a prolonged supply cut, under the US dollar. Thrust of the OPEC.

Brent futures, an international benchmark for oil prices, lost 1.69 percent or 2.71 percent to $ 60.60 per barrel at 0907 GMT.

The West West Texas Intermediate futures contracts decreased by $ 1.56, or 2.93%, to $ 51.71.

The US Energy Information Administration (EIA) on Tuesday lowered its forecast of global oil demand growth and US crude production in 2019.

A surprise increase in US crude inventories also kept oil prices under pressure.

"Investors have worried about the recent increase in stocks in the United States," ANZ said in a note.

US crude inventories rose 4.9 million barrels during the week ended June 7, to stand at 482.8 million barrels, revealed data from the American Petroleum Institute. (API). This was compared to analysts' expectations of a decrease of 481,000 barrels.

Trade tensions between the United States and China, the two largest oil consumers in the world, have also weighed on prices. President of the United States, Donald Trump, said he was blocking a trade deal with China.

European equities retreated Wednesday after the three-week highs as this month's economic recovery was out of breath due to the weak activity of Chinese factories and trade frictions.

Hedge fund managers are liquidating their bullish oil positions at the fastest rate since the fourth quarter of 2018.

While the next meeting of the Organization of Petroleum Exporting Countries is scheduled for late June, the market is looking into whether the world's major oil producers will extend their supply cuts.

OPEC, as well as non-members, including Russia, have limited their oil production by 1.2 million barrels per day since the beginning of the year to support prices.

Goldman Sachs said in a note that an uncertain macroeconomic outlook and volatile oil production from Iran and other countries could bring OPEC to postpone reductions in oil prices. offer.

"We expect that such a result will only modestly support prices, while we expect a third quarter Brent of $ 65.5 a barrel," added Goldman.

UAE Energy Minister Suhail bin Mohammed al-Mazroui said on Tuesday that OPEC members were about to reach agreement on further cuts in production.

OPEC is scheduled to meet on 25 June, followed by talks with Russia-led allies on 26 June. But Russia has suggested a change of date from July 3 to 4, sources told Reuters told Reuters.