Investing.com - Crude prices were on the backfoot on Tuesday, extending losses from the prior session as expectations of higher supply in the U.S. combined with uncertainty over a possible extension of output cuts by major crude producers dampened sentiment.
U.S. West Texas Intermediate (WTI) crude futures lost 45 cents, or about 0.8%, to $57.66 a barrel by 3:50AM ET (0850GMT). It lost 1.4% a day earlier.
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., shed 19 cents, or 0.3%, to $63.19 a barrel.
Oil prices settled lower for the first time in four sessions Monday as doubts over an extension to a production-cut deal at the OPEC meeting later this week started to creep in.
Oil ministers from the Organization of Petroleum Exporting Countries and other major producing countries will meet in Vienna on Thursday to decide whether to extend their current production agreement beyond a March 2018 deadline.
Most market analysts expect the oil cartel to extend output cuts for a further nine months until the end of next year, but the terms were so far unclear, as Russia has sent mixed signals about whether it will back the move.
In November last year, OPEC and 11 other non-OPEC producers, led by Russia, agreed to cut output by about 1.8 million barrels per day between January 1 and June 30. The agreement was extended in May of this year for a period of nine months until March 2018 in a bid to reduce global oil inventories and support oil prices.
The OPEC-led production cuts have been one of the key catalyst supporting the recent rally in oil prices amid expectations that rebalancing in oil markets are well underway.
However, fears that rising U.S. output would dampen OPEC’s efforts to rid the market of excess supplies are prevented prices from rising much further, according to market participants.
Domestic U.S. output has rebounded by almost 15% since the most recent low in mid-2016, and increasing drilling activity for new production means output is expected to grow further, as producers are attracted by climbing prices.
Meanwhile, investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products to gauge the strength of demand in the world’s largest energy consumer.
Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (2130GMT) Tuesday. Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock drop of around 3.1 million barrels.
In other energy trading, gasoline futures dipped 1.0 cent, or 0.6%, to $1.778 a gallon, while heating oil declined 0.4 cents to $1.945 a gallon.
Natural gas futures rallied 5.0 cents, or 1.7%, to $3.067 per million British thermal units.