Crude oil prices traded modestly higher early Tuesday following sharp losses on Monday as traders awaited an upcoming meeting of the Organization of Petroleum Exporting Countries and its allies due Wednesday.
West Texas Intermediate Crude
for September delivery gained 55 cents, or 0.6%, to $94.44 per barrel.
October Brent crude,
the global benchmark, gained 44 cents, or 0.5%, to $100.48 per barrel.
Back on Nymex
September gasoline fell 2 cents, or 0.6%, to $2.98 per gallon, while September heating oil
fell 5 cents, or 1.6%, to $3.34 per gallon.
September natural gas
fell 22 cents, or 2.7%, to $8.06 per million British thermal units.
What analysts are saying
Monday’s sharp drop in oil prices could make the OPEC+ group which includes Russia to be more cautious about production increases when it meets Wednesday, Commerzbank analysts said. To be sure, the team also pointed out that Monday’s decline was driven in part by the Brent contract rollover since the October contract was trading at a discount to the September contract at the time that it became the most active contract.
The drop in prices followed weak manufacturing data showing that China’s factory activity expanded at a slower-than-expected pace in July. OPEC+ will likely carefully consider signs of slowing economic activity before setting its next round of production targets, analysts said.
Furthermore, the fact that oil production in Libya has now returned to normal levels for the first time in four months could also help dissuade OPEC+ from trying to increase production.