Oil prices fell on Wednesday, hit by rising supplies in the United States and expectations that producer group OPEC could relax voluntary output cuts.
Benchmark Brent crude LCOc1 was down 30 cents at $75.58 a barrel by 0910 GMT. U.S. light crude CLc1 was 20 cents lower at $66.16.
The Organization of the Petroleum Exporting Countries and some non-OPEC producers, including Russia, started withholding output in 2017 to reduce a global supply overhang and prices have risen by around 60 percent over the last year, reports Reuters.
But the outlook for the oil market in the second half of this year is uncertain, analysts say, and OPEC argues there are downside risks to global demand.
OPEC and other producers will meet on June 22-23 in Vienna to discuss future production policy.
“More oil from OPEC+ is the base case,” said Bjarne Schieldrop, chief commodities analyst at Swedish bank SEB.
“Saudi Arabia and Russia have already started to lift production,” he said. “Unofficial sources have said that Russia will propose to return production back to the October 2016 (level), i.e. removing the cap altogether over a period of three months.”
Lukman Otunuga, analyst at futures brokerage FXTM, said higher oil production and forecasts of more to come were undermining prices.
“The prospect of easing supply curbs from OPEC-led producers continues to be reflected in oil’s overall depressed price,” Otunuga said.
In the United States, the American Petroleum Institute said on Tuesday that crude oil inventories rose by 830,000 barrels in the week to June 8, to 433.7 million.
Rising U.S. stocks partly reflect a surge in U.S. crude production C-OUT-T-EIA, which has jumped by almost a third in the last two years to a record 10.8 million barrels per day (bpd).
With output in Russia rising back above 11 million bpd in June and Saudi production climbing to more than 10 million bpd, supplies from the top three producers are increasing.
“With rising production from U.S. shale adding to oil’s woes and reviving oversupply concerns, further downside could be a possibility in the short to medium term,” Otunuga said.
Official U.S. production and inventory data is due to be published on Wednesday by the Energy Information Administration.