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Oil declines ahead of API stockpile data as OPEC prepares to meet

Published 2017-05-23, 08:31 a/m
© Reuters.  Oil prices edge lower
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Investing.com - Oil prices edged lower in North American trading on Tuesday, as investors looked ahead to weekly data from the U.S. on stockpiles of crude and refined products.

Industry group the American Petroleum Institute is due to release its weekly report at 4:30PM ET (20:30GMT) later on Tuesday.

Official data from the Energy Information Administration will be released Wednesday, amid forecasts for an oil-stock drop of around 2.7 million barrels.

The U.S. West Texas Intermediate crude July contract shed 5 cents, or around 0.1%, to $51.08 a barrel by 8:30AM ET (12:30GMT). The U.S. benchmark settled higher for the fourth straight session on Monday after hitting its strongest since April 19 at $51.43.

Elsewhere, Brent oil for July delivery on the ICE Futures Exchange in London dipped 7 cents to $53.81 a barrel, after climbing to its highest since April 19 at $54.37 in the prior session.

Oil's gains on Monday came amid growing expectations that OPEC members will extend supply cuts for a prolonged period when they meet later this week.

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 June 30-deadline.

In November last year, OPEC and 11 other non-OPEC producers, including Russia, agreed to cut output by about 1.8 million barrels per day between January 1 and June 30.

Most market analysts expect the oil cartel to extend output cuts for a further nine months until March 2018, instead of six months as previously expected.

There is also talk that OPEC is looking at the option of deepening current production cuts, but it is not clear whether there would be support for that.

So far, the production-cut agreement has had little impact on global inventory levels due to rising supply from producers not participating in the accord, such as Libya, and a relentless increase in U.S. shale oil output.

Elsewhere on Nymex, gasoline futures for June inched down 0.2 cents, or 0.1%, to $1.657 a gallon, while June heating oil slipped 0.2 cents to $1.599 a gallon.

Natural gas futures for July delivery dropped 4.3 cents to $3.381 per million British thermal units.

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