Oil prices pulled back some in Asian trading Tuesday following a combined 4% advance the prior four sessions, as bulls took some profits ahead of Thursday's meeting of the Organization of the Petroleum Exporting Countries.
Major oil producers are expected to extend their current production-cut deal at that gathering as crude prices remain at just half of the levels seen before the market plunge started three years ago.
Global supplies remain near record levels, and the OPEC-led deal has had as a key goal returning them to 5-year averages. There's been little improvement on reducing supplies thus far, prompting what many see as a need to extend--and possibly deepen--current production caps.
Light, sweet crude for July delivery on the New York Mercantile Exchange was recently down 0.4% at $50.91 a barrel in the Globex electronic session. Brent crude, the global benchmark, eased 0.5% to $53.62.
"Prices are fluctuating at this point because there is a lot of speculative trading," says Li Li, energy research director at ICIS China. "Currently, the oil markets are quite bullish ahead of the OPEC meeting, but investors should be careful now and not forget that there is still too much oil."
Gnanasekar Thiagarajan, director of Commtrendz Risk Management, added market players will be closely watching pre-meeting "OPEC-speak." He noted, "Prices could rally further only if there are some strong positive comments."
Nymex June gasoline futures were recently down 0.3% at $1.6583 a gallon, diesel dropped 0.3% to $1.6038 and ICE gasoil shed 0.5% to $476.75 per metric ton.
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(END) Dow Jones Newswires
May 23, 2017 00:24 ET (04:24 GMT)