Oil slips as US inventories rise; OPEC in focus

Oil prices fell on Wednesday, amid signs of swelling U.S. inventories, though losses were limited as traders continued to weigh prospects of a coordinated production cut among major global oil producers ahead of this week’s OPEC meeting.

International Brent crude oil futures declined 17 cents, or about 0.3%, to $61.92 per barrel by 8:55AM ET (13:55 GMT).

U.S. West Texas Intermediate crude futures dipped 6 cents, or roughly 0.1%, to $53.19 a barrel.

Prices were pressured by a weekly report from the American Petroleum Institute on Tuesday, which showed that U.S. crude inventories rose by 5.4 million barrels in the week ended Nov. 30.

The U.S. Energy Information Administration will release its official weekly oil supplies report on Thursday. It comes out one day later than usual because of Wednesday’s national day of mourning in honor of former President George H.W. Bush.

Oil’s losses were held in check amid growing expectations that major producers, led by Saudi Arabia and Russia, will agree some form of production cut at a key meeting of OPEC ministers later this week.

The oil cartel meets in Vienna on Thursday, with a decision due Friday.

According to recent reports, OPEC and its allies are working towards a deal to reduce oil output by at least 1.3 million barrels per day (bpd) in an effort to tighten supply and prop up prices.

“Oil sentiment is very fragile given clear event risk at play,” Harry Tchilinguirian, head of commodity strategy at BNP Paribas (PA:BNPP) told the Reuters Global Oil Forum.

In other energy trading, gasoline futures rose 1.2% to $1.444 a gallon, while heating oil dipped 0.1% to $1.898 a gallon.

Natural gas futures climbed 2.3% to $4.559 per million British thermal units.