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Oil futures edged lower in quiet trade Tuesday as traders looked ahead to data on U.S. crude supplies and a meeting by an OPEC+ panel charged with monitoring the effect of production cuts by major producers.
West Texas Intermediate crude for September delivery CL.1, -0.30% CLU20, -0.30% was down 23 cents, or 0.5%, at $42.66 a barrel on the New York Mercantile Exchange. The global benchmark, October Brent crude BRN00, -0.04%, was fell 11 cents, or 0.2%, to $45.26 a barrel on ICE Futures Europe.
Crude gained ground Monday, buoyed in part by reports that compliance with output cuts by members of OPEC+ — made up of the Organization of the Petroleum Exporting Countries and its allies, notably Russia — ran at a historically high 94% to 97% in July, according to surveys. OPEC+’s Joint Technical Committee, which met Monday, pegged compliance at 95%, analysts said.
The OPEC+ Joint Ministerial Monitoring Committee, which makes recommendations on output, is set to meet Wednesday, but is largely expected to take a wait-and-see approach after members in August went ahead with a plan to scale back output cuts from 9.7 million barrels a day to 7.7 million barrels a day, albeit with some producers who had failed to abide by earlier restrictions agreeing to maintain deeper cuts.
“Compliance with the previous cuts has been high though which will reinforce confidence in any future action that may be necessary but for now, the best thing for the group may be to just hold fire as further setbacks in the coming months are inevitable, again,” said Craig Erlam, senior market analyst at OANDA, in a note.
Trades will also be looking toward data on U.S. supplies. The American Petroleum Institute is expected to release its weekly take on crude inventories after the closing bell Tuesday, while the Energy Information Administration’s more closely followed weekly data is due Wednesday morning.
Analysts surveyed by S&P Global Platts expect the EIA data to show U.S. crude supplies fell 3.8 million barrels last week, while gasoline stocks are expected to show a decline of 2 million barrels. Distillate supplies are forecast to fall 900,000 barrels.
