Oil futures lost ground Tuesday, feeling pressure as ships resumed moving through the Suez Canal and traders turned their attention to a meeting of the Organization of the Petroleum Exporting Countries and its allies.
West Texas Intermediate crude for May delivery
fell $1.34, or 2.2%, to $60.22 a barrel on the New York Mercantile Exchange. May Brent crude
the global benchmark, was down $1.24, or 1.9%, at $63.74 a barrel on ICE Futures Europe.
Saudi Arabia is likely to urge OPEC and its allies, a group known as OPEC+, to extend existing production curbs through May at Thursday’s meeting, according to a report by Reuters.
Crude is on track for monthly declines, with WTI down 1.8% in the month to date and Brent off 0.8%, though both remain up more than 20% so far this year.
“Prior to the weakness in the market, expectations were that the group would start easing cuts more aggressively from May. However, the wobble we have seen in prices means that OPEC+ will likely need to take a cautious approach once again,” said Warren Patterson, head of commodities strategy at ING, in a note.
“The market is now more split around what the group will decide. We are of the view that the group will likely hold output levels unchanged, with OPEC+ wanting to avoid another selloff. However, if we do see any easing in cuts, it is likely to be very modest,” he said.
Meanwhile, shipping has resumed through the Suez Canal after the container ship Ever Given was successfully refloated Monday. The ship ran aground last week, halting traffic through the chokepoint, which accounts for around 10% of global seaborne oil trade.