Oil prices fell 1% on Tuesday as investors worried about a supply glut after Iranian and U.S. delegates made progress in their talks and expectations that OPEC+ would decide to raise output at a meeting this week.
Brent crude futures settled down 65 cents, or 1%, at $64.09 a barrel, while U.S. West Texas Intermediate crude fell 64 cents, or about 1.04%, to $60.89 a barrel.
The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, are not expected to change policy at a meeting on Wednesday.
However, another meeting on Saturday is likely to agree on a further accelerated oil output increase for July, three delegates from the group told Reuters.
Meanwhile, Iranian and U.S. delegates concluded a fifth round of talks in Rome last week. Despite limited signs of progress, there are plenty of sticking points, most notably Iran's uranium enrichment.
"OPEC+ also meets next week where they are likely to agree to further production increases, which, if it happens, would be a major near-term drag on crude, especially if Iran adds barrels in a possible (U.S.) deal," said Dennis Kissler, senior vice president of trading at BOK Financial.
If nuclear talks between the U.S. and Iran fail, that could mean further sanctions on Iran, which would limit Iranian oil supplies, while any resolution could add Iranian supplies to the market.
Also on the supply side, U.S. crude stockpiles likely rose by about 500,000 barrels last week, a preliminary Reuters poll found on Tuesday.
Supporting prices, U.S. President Donald Trump's decision to extend trade talks with the European Union until July 9 eased immediate concerns about tariffs that could hurt fuel demand. Wall Street rose on Trump's trade suspension.
Easing trade concerns are providing support, said UBS analyst Giovanni Staunovo, adding that price gains remain limited until it is clear what OPEC+ will decide on Saturday. Also helping prices, wildfires in the Canadian province of Alberta have prompted some oil and gas production to be temporarily halted. (alg)
Source: Reuters
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