NEW YORK (Reuters) - Oil edged up on Tuesday, supported by expectations that OPEC and other producing countries next week would extend output cuts, but signs of higher U.S. crude output kept prices under pressure.
“Geopolitical tensions in the Middle East and a deteriorating macroeconomic picture in Venezuela will remain supportive of oil prices in the run-up to the November OPEC meeting,” said Abhishek Kumar, Senior Energy Analyst at Interfax Energy’s Global Gas Analytics in London.
“However, persistently high oil production in the United States will be the predominant bearish factor limiting gains in oil prices,” Kumar noted.
Brent futures LCOc1 rose 35 cents, or 0.6 percent, to settle at $62.57 a barrel, while U.S. West Texas Intermediate (WTI) crude CLc1 gained 41 cents, or 0.7 percent, to settle at $56.83 per barrel.
The American Petroleum Institute (API), an industry trade group, was due to release its data on U.S. crude inventories at 4:30 p.m. EST (2130 GMT) on Tuesday. Official U.S. government inventory data was due on Wednesday morning.
Analysts in a Reuters poll forecast U.S. weekly crude stocks declined 1.5 million barrels in the week ended Nov. 17.
Analysts said Brent was expected to fluctuate in a range between $61 and $63 ahead of the Organization of the Petroleum Exporting Countries’ meeting on Nov. 30. OPEC, Russia and other producers are expected to extend a deal to cut output to fight a global supply overhang and support prices. The deal’s expiry date is currently March 2018.
“The market is just waiting for confirmation that OPEC wants to move on with the extension,” said Ole Hansen, senior manager at Saxo Bank.
Doubts about the willingness of some participants including Russia to keep restricting production have weighed on prices.
Russian news agency TASS reported that the country’s oil producers had met with the energy ministry to discuss a six-month extension, as opposed to the nine months originally floated by President Vladimir Putin.
In Venezuela, authorities arrested the acting president of its U.S.-based refiner Citgo and five of its top executives on corruption accusations, the chief prosecutor said.
The biggest headache for OPEC has been a rise in U.S. drilling activity, led by shale oil producers.
Energy consultancy Westwood Global Energy Group said U.S. output would climb even faster than implied by the rising oil rig count, which has jumped from 316 rigs in mid-2016 to 738 last week, as producers become more productive per well.
“Westwood Global Energy forecasts an 18 percent increase in active rigs in 2018,” the consultancy said.
Additional reporting by Polina Ivanova in London and Keith Wallis in Singapore; Editing by David Gregorio and Marguerita Choy