On Tuesday, oil prices fell more than 1% as the Suez Canal opened for traffic and the US dollar rose.
Investors focused on Thursday’s OPEC + ministerial meeting. Considering the demand expectations, the group is expected to expand its supply limits.
Brent crude fell 84 cents, or 1.3%, to settle at $64.14 a barrel while West Texas Intermediate (WTI) oil ended the session down $1.01, or 1.6%, at $60.55 barrel.
According to sources, based on the American Petroleum Institute’s weekly report, it has maintained its post-comparison trade losses after industry data showed US crude inventories rose 3.9 million barrels last week.
Official data is expected to be released at 1430 GMT on Wednesday.
Traffic opened in the Suez Canal, which was blocked for almost a week, after the container ship Ever Given floated. The channel chief said the backlog of the 422 ships could be resolved in a matter of days.
The dollar rose against the major currencies and climbed to a one-year high against the yen. The strong dollar makes pricing oil in dollars more expensive in other currencies.
The market focused on Thursday’s meeting of allies, including the Organization of Petroleum Exporting Countries (OPEC) and Russia, with concerns that the physical supply shortage would decrease.
In a statement Monday, it was said that Saudi Arabia is ready to agree to extend production cuts by June and extend its own additional cuts amid the latest coronavirus locdowns wave.
According to a research note, the alliance is expected to increase production by 500,000 barrels per day (bpd) increments from June to August.
It is very likely that renewed lockdowns and problems with vaccines will prevent the demand for 1 million barrels of oil per day from regaining in 2021.
According to traders and analysts, the key dilemma in limiting global supply is the heavy US and UN sanctions imposed on OPEC member Iran while ignoring exports to China.
It is a fact that 1 million barrels of Iranian crude oil reached China as crude oil from other channels this month.
