Oil prices dropped on Tuesday amid expectations that major producers may agree to increase oil supplies at their meeting this week, as well as concerns about slowing Chinese demand.
Brent crude dropped 14 cents or 0.2% to $63.55 a barrel by 1145 GMT, after losing 1.1% the previous day. U.S. West Texas Intermediate (WTI) crude fell 2 cents to $60.62 a barrel, having lost 1.4% on Monday.
They both touched the lowest in more than 6 days, extending losses that started late last week.
Expectations that the Organization of Petroleum Exporting Countries and its allies will increase oil production as of April push the prices down. The reason that oil prices are not falling further is actually expected some production return by traders. The market looks healthy enough for oil prices to bring out more products.
The group could discuss the return of 1.5 million barrels of crude oil a day to the market at Thursday’s meeting.
With Saudi Arabia’s voluntary cut added to the discounts agreed in the previous OPEC + pact, OPEC oil production fell in February, ending a seven-month increase in a row.
Meanwhile, China’s factory activity growth fell to a nine-month low in February. While this could reduce Chinese demand for crude oil and suppress oil prices, oil purchases from the world’s largest importer have recently eased.
There are signs that the physical market is not as tight as the futures markets suggest.
