Oil prices eased further on Tuesday as the rally that took Brent to a more than two-year high ran out of steam.
Brent crude, the global oil benchmark, eased 0.3% to $55.95 a barrel on London's ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were trading down 0.2% at $50.46 a barrel.
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Prices advanced in September on projections for tightening supply, but have subsequently reversed gains to fall more than 5% in the past week.
"What the market is always concerned about is as the price goes higher, the world produces more, and prices are capped," said Richard Fullarton, founder of London-based hedge fund Matilda Capital Management Ltd.
Investors are watching the Organization of the Petroleum Exporting Countries for signs of whether its members will extend their production cuts beyond the current end date of March 2018.
"A smart move for OPEC would be to keep the cuts in place for longer than the people expect, to create a new base for oil prices," said Mr. Fullarton.
There are also questions over whether OPEC members are adhering to quotas, which could be more problematic if prices rise, analysts said.
Late last week analysts surveyed by Reuters pegged OPEC's September output at 32.86 million barrels a day, up from the previous month and above its production cap, indicating a fall in compliance by its members.
"One can only conclude that unless OPEC approaches the original production target of its 14 members of just below 32 million barrels per day, rebalancing will suffer a major and possibly prolonged setback," said Tamas Varga, analyst at brokerage PVM.
Nymex reformulated gasoline blendstock--the benchmark gasoline contract --fell 0.3% to $1.55 a gallon. ICE gasoil changed hands at $527.75 a metric ton, down $3.75 from the previous settlement.
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(END) Dow Jones Newswires
October 03, 2017 06:57 ET (10:57 GMT)