Oil prices have edged-down due to doubts over the extension of output cuts and a large build-up of distillate stocks in the US.
Reuters reported that Brent crude LCOc1 futures fell 1.18%, or $0.47, to $39.32 a barrel while US West Texas Intermediate (WTI) crude CLc1 futures were down by 1.80%, or $0.67, to $36.62 a barrel.
Data from industry group the US Energy Information Administration (EIA) has highlighted a rise in gasoline stocks by 2.8 million barrels. Meanwhile, the distillate stocks rose by 9.9 million barrels.
This build in inventories also weighed on prices, said CMC Markets chief market strategist Michael McCarthy.
The world’s two biggest oil producers Saudi Arabia and Russia agreed to support on the extension of nearly ten million barrels per day in supply cuts backed in April by the OPEC+ group into July.
However, they failed to agree on holding an OPEC+ meeting on 4 June to discuss the supply cuts.
National Australia Bank commodity research head Lachlan Shaw was quoted by the news agency as saying: “The market has taken a look at that and said it’s getting more complicated to get that deal over the line.”
Furthermore, Saudi Arabia, along with Kuwait and the UAE, is not planning to extend voluntary additional supply cuts of 1.18Mbpd beyond this month.
This is a signal that crude supply may increase in July irrespective of the decision of the OPEC+.