Crude oil futures fell in the middle of the trading week after reports suggested the world’s largest oil cartel is considering accelerating production in the coming months. The losses were limited after President Donald Trump hinted at possible tariff reductions on Chinese goods.
May West Texas Intermediate (WTI) crude oil futures fell $1.40, or 2.2%, to $62.27 per barrel on Wednesday on the New York Mercantile Exchange. US crude prices are down 13% this year.
Brent, the global benchmark for oil prices, slumped below $67 midweek. June Brent crude futures erased $1.32, or 1.96%, to $66.12 per barrel on London’s ICE Futures exchange.
Sources told Reuters that several members of the Organization of the Petroleum Exporting Countries (OPEC+) are thinking about expanding oil output increases in June.
Experts say this would not be surprising, as there have been internal squabbles over production quotas and producers frustrated with capping output.
Kazakhstan, for example, has been producing more than its allotted quota. The nation’s Energy Ministry says it wants to maintain a supply-demand balance.
“Our participation in OPEC+ is an important tool for ensuring global stability, creating conditions for the implementation of national plans and attracting investment. We are committed to constructive work within the framework of the agreement and fulfilling our obligations,” the statement quoted Energy Minister Erlan Akkenzhenov as saying.
Meanwhile, according to the Energy Information Administration (EIA), US crude oil supplies rose 244,000 barrels for the week ending April 18, down from the build of 515,000 barrels in the previous week. This was higher than the consensus forecast of a drawdown of 700,000 barrels.
Gasoline inventories declined 4.476 million barrels, higher than the market estimate of 1.15 million barrels. Heating oil stocks tumbled 21,000 barrels, and distillate supplies plunged 2.353 million barrels.
This comes as President Trump suggested that his administration might lower tariffs on imported Chinese goods ahead of negotiations with Beijing.
In other energy markets, May natural gas futures dipped $0.022, or 0.73%, to $3.00 per million British thermal units (Btu). May gasoline and heating oil futures were little changed at $2.07 per gallon, respectively.