Russian government comments on prospects for stepping up cooperation with OPEC.
Singapore: Oil prices slipped on Wednesday on expectations for a build-up in U.S. crude inventories, but Russian government comments on prospects for stepping up cooperation with OPEC to coordinate output cuts braked steeper declines.
U.S. WTI crude futures were at $63.26 a barrel at 0626 GMT, down 25 cents, or 0.39 percent, from their previous settlement.
Brent crude futures dipped to $67.83 per barrel, down 29 cents, or 0.43 percent, after it rose 0.7 percent on Tuesday.
U.S. crude inventories likely saw a build for the second straight week, rising 200,000 barrels in the week ended March 30, a Reuters poll of industry analysts showed on Tuesday.
Official inventory data will be published by the Energy Information Administration (EIA) late on Wednesday.
“Crude oil prices look poised to consolidate as markets anticipate the impending EIA report,” said Benjamin Lu Jiaxuan, commodities analyst at Singapore-based brokerage firm Phillip Futures.
“The market would likely stay in a holding pattern before the story on oil prices unfolds on the back of U.S. petroleum data.”
Market watchers said oil also felt the squeeze of lingering trade tensions between the United States and China. Beijing on Wednesday condemned the Trump administration’s move to push ahead with plans to slap tariffs on about $50 billion of Chinese industrial and hi-tech products, and vowed imminent counter-measures in the escalating trade dispute.
“Equities have been the most significant external driver for the short-term price direction of oil, with the significant volatility coming (partly) from the perception of a trade war,” said Dominic Chirichella, senior partner at the Energy Management Institute in New York.
Meanwhile, Russian Energy Minister Alexander Novak said on Tuesday that a joint organisation between the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries may be set up after the current deal on production cuts expires at the end of this year.
“Russia is testing the upper production bands but provided they don’t ramp up dramatically I think this news will be viewed in a positive light for prices,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore.
Russia’s oil output rose in March to 10.97 million barrels per day, official data showed earlier this week, prompting some traders to worry the OPEC-non-OPEC alliance to help balance oil markets was under threat.