By Peter Nurse
Investing.com - Oil markets slipped lower in tight trading ranges Monday, with traders wary of taking positions as the Organization of the Petroleum Exporting Countries could agree to meet as soon as this week to discuss whether to extend record production cuts.
AT 9:05 AM ET (1305 GMT), U.S. crude futures traded 1.4% lower at $34.97 a barrel, underperforming amid fears civil unrest across America will limit economic growth just as states reopen from the coronavirus-inspired shutdown. The international benchmark Brent contract fell 0.3% to $37.72.
Both contracts recorded their strongest monthly gains in years in May, helped by OPEC crude production dropping to its lowest in two decades after a deal was reached in April to cut output by a record 9.7 million barrels a day.
However, that deal runs out at the end of June, and OPEC, and its allies including Russia, are considering bringing forward its meeting, originally scheduled for June 9-10, to this week.
Media reports suggest the alliance is looking at extending current cuts of 9.7 million barrels a day by 1-2 months, as under the current deal the group is set to reduce the scale of cuts to 7.7 million barrels a day from July.
“A shorter period may make an extension more palatable to the Russians, who were not keen to extend current cuts through until the end of this year, which was reportedly suggested by other members of the deal,” said analysts at ING, in a research note to clients.
Saudi Arabia is seen as the main instigator of this move to extend the production cuts, and the top exporter is expected to raise its official selling price for all grades it sells to Asia in July, Reuters reported, citing industry sources.
Saudi Arabia is expected to increase the July OSP for Arab Light crude by $3.80 a barrel on average, a survey of five refinery sources showed.