Oil up on US stocks, Libya ahead of Opec meeting
LONDON: Oil prices rose on Wednesday, supported by a drop in US commercial crude inventories and the loss of storage capacity in Libya, with investors cautious ahead of a biannual meeting of Opec exporters to decide production policy.
Benchmark Brent crude was up 50 cents at $75.58 a barrel by 08:35 GMT. US light crude was 50 cents higher at $65.57.
US crude inventories fell by 3 million barrels to 430.6 million barrels in the week to June 15, according to an American Petroleum Institute report. Traders said a drop in Libyan supplies due to the collapse of an estimated 400,000-barrel storage tank also helped push up prices.
Looming large over markets, however, were meetings scheduled on June 22-23 in Vienna of Opec with other big producers. Saudi Arabia, as well as Russia, which is not a member of the cartel but is the world’s biggest oil producer, are pushing to loosen supply controls introduced to prop up prices in 2017.
Other Opec members, including Iran, are against such a move, fearing a sharp slump in prices.
“Unlike previous meetings, the run-up to this Opec meeting is fraught with uncertainty with Iran from the onset adopting a very entrenched opposition to any supply increase,” Harry Tchilinguirian, head of global oil strategy at French bank BNP Paribas, said.
Technical analysts who follow price charts say prices are unpredictable ahead of the Opec meeting: “The market is now stuck in an Opec-wary condition. It is likely to be thrown around by headlines and over enthusiastic participation is not advised,” said Robin Bieber, director of brokerage PVM Oil Associates. — Reuters