NEW YORK: Oil futures were little changed on Tuesday ahead of a meeting of OPEC+ producers this week that may not lead to a further boost in crude supply amid concerns a possible global recession could limit energy demand.
The Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, meet on Wednesday nL8N2Z94QT. Two of eight sources said a modest output hike would be discussed, while the rest said a boost was unlikely.
OPEC+ nL1N2ZE104 sees this year’s oil market as slightly less supplied than previously thought.
Brent futures rose 25 cents, or 0.3%, to $100.28 a barrel by 10:07 a.m. EDT (1407 GMT), while U.S. West Texas Intermediate (WTI) crude rose 19 cents, or 0.2%, to $94.08.
“There’s a lot more uncertainty this time around,” said Craig Erlam of brokerage OANDA of the OPEC+ meeting. “The decision this week will tell us just how unified the group still is.”
Oil soared earlier in 2022, with Brent in March coming close to its all time high of $147.50 a barrel after Russia’s invasion of Ukraine in February added to supply concerns. Worries about slowing growth have since eclipsed tight supply.
OPEC+ sees slightly smaller oil market surplus this year, sources say
Surveys showed factories across the United States, Europe and Asia struggled for momentum in July as flagging global demand and China’s strict COVID-19 restrictions slowed production.
“These readings did nothing to mitigate the fears of recession,” said Tamas Varga at oil broker PVM.
Casting a cloud over the market are worries that a visit to Taiwan by U.S. Speaker of the House Nancy Pelosi will escalate tensions between the United States and China. Stocks slipped and bond yields fell on worries about the visit.
The United States, meanwhile, imposed sanctions on Chinese and other firms it said helped to sell tens of millions of dollars’ in Iranian oil and petrochemical products to East Asia as it seeks to raise pressure on Tehran to curb its nuclear programme.
Also coming into view is the latest weekly reading on U.S. oil inventories.
Analysts polled by Reuters forecast U.S. crude inventories fell by 500,000 barrels last week.
The American Petroleum Institute (API), an industry group, will issue its U.S. inventory report at 4:30 p.m. EDT (2030 GMT), followed by the U.S. Energy Information Administration (EIA) at 10:30 a.m. EDT (1430 GMT) on Wednesday.
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