Opec's second-biggest producer Iraq said that the group was discussing several options for its supply pact, including an extension beyond March and a further output cut. Nigeria and Libya will send representatives to the meeting despite being exempt from the current deal, two Opec sources said. Rising output from both countries has kept a lid on price gains, prompting suggestions that they could be included in the deal.
Brent crude futures were down 30 cents at $55.20 a barrel by 2:30 pm EDT (1830 GMT), not far off a five-month high of $55.99. US West Texas Intermediate (WTI) crude futures fell 35 cents to $49.56. "It feels kind of like positioning ahead of tonight's report but there's not a lot of action behind the move," said Phil Flynn, analyst at Price Futures Group in Chicago.
Industry group the American Petroleum Institute releases its US weekly oil stock data at 4:30 pm EDT (2030 GMT), a day ahead of data from the US Energy Department. Analysts forecast crude stocks rose 3.5 million barrels last week, as fuel inventories drew down, which would continue a trend established in the wake of Hurricane Harvey, as imports resumed while refineries were still restarting.
Restarts have run into problems in places. Valero's Port Arthur refinery shut its crude unit on Tuesday after a tank fire broke out in the early morning. Demand for crude is expected to rebound in coming weeks in the United States in the wake of Harvey, which hit the Gulf Coast in late August. The current threat is Hurricane Maria, now making its way through the Caribbean, but it is not expected to threaten the US Gulf, instead turning north in the Atlantic Ocean.
Still, cargoes have been shifted around as the storm could dampen oil demand and disrupt maritime trading. The market has been strong since last week, when Brent gained over 3 percent and WTI jumped nearly 5 percent in the week, after the International Energy Agency lifted its 2017 demand outlook and Opec estimated the world would need more of its crude next year.
Copyright Reuters, 2017