Oil slips to $71, hit by talk of higher OPEC production

Oil prices

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Brent oil slipped to around 71 dollars a barrel on Tuesday, pressured by expectations of higher U.S. inventories and concern about Russia’s willingness to stick with OPEC-led supply cuts.

Analysts on average expect U.S. crude stockpiles to have risen by 1.9 million barrels last week, the fourth straight increase.

The first of this week’s stockpile reports is due at 2030 GMT from the American Petroleum Institute.

“We have already seen these inventories going higher in the last week’s print,” said Naeem Aslam, Chief Market Analyst at TF Global Markets in London.

“The rising inventory data has raised many questions for investors – no one wants to see the oil glut again.”

Brent crude, the global benchmark, was down 12 cents at 71.06 dollars a barrel at 0801 GMT. U.S. West Texas Intermediate (WTI) crude gained six cents to 63.46 dollars.

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While OPEC-led supply cuts have boosted Brent by more than 30 per cent this year, gains have been limited by worries that slowing economic growth could weaken demand for fuel.

Oil also fell on Monday after comments from Russia raised concern that the OPEC-led supply-cutting pact may not be renewed.

Russia and the producer group may decide to boost output to fight for market share with the U.S., TASS news agency сited Finance Minister Anton Siluanov as saying.

The Organisation of the Petroleum Exporting Countries and other producers including Russia, an alliance known as OPEC+, have been cutting output since Jan. 1.

They will decide in June whether to continue the arrangement.

“There is a growing concern that Russia will not agree on extending production cuts and we could see them officially abandon it in the coming months,” said Edward Moya, Senior Market Analyst at OANDA.

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