Oil prices eased on Wednesday as the possibility of higher OPEC output weighing on the market, although geopolitical risks are expected to keep prices near multi-year highs, Reuters reported.
Brent LCOc1 futures fell 37 cents, or nearly 0.5 percent, to $79.20 a barrel by 0636 GMT, after climbing 35 cents on Tuesday. Last week, the global benchmark hit $80.50 a barrel, the highest since November 2014.
U.S. West Texas Intermediate (WTI) crude CLc1 futures eased 21 cents, or nearly 0.3 percent, to $71.99 a barrel, having climbed on Tuesday to $72.83, also the highest since November 2014.
“It looks like the market is pausing at current levels,” said Michael McCarthy, Chief Market Strategist at brokerage CMC Markets.
“If sanctions are introduced against Iran, most of the OPEC producers would like to be pumping more oil, particularly giving the higher prices.”
The Organization of the Petroleum Exporting Countries (OPEC) may decide to raise oil output as soon as June due to worries over Iranian and Venezuelan supply and after Washington raised concerns the oil rally was going too far, OPEC and oil industry sources familiar with the discussions told Reuters.
OPEC-led supply curbs have largely cleared an inventory surplus in industrialized countries based on the deal’s original goals and stocks continue to decline.
“...Investors are mindful of upcoming talks between Russia and Saudi Arabia about whether they should look at a controlled relaxation of over-compliance with their output cut agreement,” ANZ said in a note.