OPEC sees uncertain times as oil price drops

OIL FELL on Tuesday, reversing earlier gains, although volatility subsided to its lowest in three weeks, as investors prepared for a key meeting of the OPEC producer group next week.

The Organization of the Petroleum Exporting Countries released its monthly report on Tuesday, in which it cited the high degree of uncertainty hanging over the global oil market.

Brent crude futures fell 35 cents to $76.11 a barrel, while US West Texas Intermediate crude futures traded 13 cents lower at $66.23.

“The market has been rangebound for two weeks and that is likely to remain the case,” Ole Hansen, senior manager at Saxo Bank, said.

OPEC, together with partners including Russia, has cut oil output by 1.8 million barrels per day (bpd) since January 2017 in an effort to boost the market.

Volatility in oil prices has subsided due to caution around the group’s meetings scheduled for June 22-23, at which it will decide on future supply policy.

With US sanctions threatening to cut Iranian exports and the potential for more declines in Venezuelan production, OPEC kingpin Saudi Arabia and Russia have indicated they would be willing to raise output to make up for any supply shortfall.

Russian production reportedly climbed to 11.1 million bpd in early June.