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Oil Prices Fall After U.S. Asks OPEC to Increase Production

Published 05/06/2018, 15:51
Updated 05/06/2018, 15:58
© Reuters.  Oil was lower on Tuesday.
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Investing.com - Oil prices were lower on Tuesday, amid news that the U.S. had asked OPEC to increase its supply output.

Crude oil futures decreased 0.25% to $64.59 a barrel as of 10:50 AM ET (14:50 GMT). Meanwhile Brent crude futures, the benchmark for oil prices outside the U.S., slumped 159% to $74.09.

The price of oil was held back after reports that the U.S. had unofficially asked the Organization of the Petroleum Exporting Countrie and Russia to raise its oil output, with no specific figure cited.

Reuters reported May 25 that the group was considering raising supply by one million barrels per day as early as June, as the organization faces losses from Venezuela and Iran.

The organization is set to meet in Vienna on June 22. OPEC has been cutting crude output by 1.8 million barrels per day (bpd) to prop up oil prices. The pact began in January 2017 and is set to expire at the end of 2018.

Prices were also held back by concern that the U.S. is increasing production, after two oil rigs were added in the U.S. in the week of June 1, bringing the total count to 861, according to data from Baker Hughes on Friday. It was the highest level rig count since March 2015.

Investors will look closely to data this week on U.S. commercial crude inventories to gauge how fast American supply will rise.

The American Petroleum Institute releases it weekly data on U.S. crude oil inventories at 4:30 PM ET (20:30 GMT) on Tuesday, followed by the EIA report at 10:30 AM ET (14:30 GMT) on Wednesday.

In other energy trading, Gasoline RBOB Futures decreased 1.46% at $2.0935 a gallon, while heating oil fell 1.45% to $2.1215 a gallon. Natural gas futures was down 1.40% to $2.889 per million British thermal units.

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