New Delhi: Crude oil prices fell in early trade on Wednesday ahead of a meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its allies to begin later in the day.
OPEC and its allies are due to set their production policy for September through a virtual meeting on Wednesday.
Brent’s October contract on the Intercontinental Exchange was currently at $100.04 a barrel, down 0.50% from its previous close.
West Texas Intermediate (WTI) September contract fell 0.41% to $94.03 a barrel on the NYMEX.
Investors were also tracking US House Speaker Nancy Pelosi’s visit to Taiwan, adding to geopolitical concerns that could escalate tensions between the US and China.
“OPEC does not expect a significant increase in output due to limited capacity and a weak demand outlook. However, market players want to see whether the US President has managed to persuade Saudi Arabia to increase production,” said Ravindra Rao, Head of Commodity Research at Kotak Securities.
“US crude oil and gasoline stocks are expected to decline from the US EIA inventory report. However, the API report noted an unexpected rise in crude stocks and a minor decline in gasoline stocks. Stocks and crude may remain oriented ahead of OPEC decision, although growth concerns and volatile risk sentiment could put pressure on prices,” he said.
According to the API report released on Tuesday, crude oil reserves in the US increased by 2.2 million barrels.
Rahul Kalantri, Vice President, Mehta Equities, said, “We expect volatility in crude oil prices in today’s session ahead of the outcome of the OPEC+ meeting and the US EIA weekly inventory report.
On Tuesday, US Federal Reserve officials indicated that the central bank would continue to tighten monetary policy to contain inflation. The move, in turn, could affect demand and raise concerns of a further burden on oil prices.
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