Crude oil prices fell yesterday with the global benchmark, Brent crude heading towards its lowest finish in about one month after a report revealed a surprise weekly climb in the United States' domestic crude inventories.
Prices had traded higher in early dealings, buoyed by reports Venezuela may not deliver some of its contracted crude oil exports on the heels of political upheaval.
An economic crisis fed by the country's political instability has limited global supply, helping the Organisation of the Petroleum Exporting Countries (OPEC) hit its target for reduced output faster than expected.
Benchmark indices for crude oil were mixed throughout much of the previous session after reports circulated that the US was calling for more oil from OPEC tacitly to protect against steady declines from Venezuela and possible declines from Iran.
OPEC is in its second year of an effort to erase a surplus in global crude oil inventories through coordinated production cuts.
The market is near balance, so there's little margin for shocks like an additional loss of oil.
The US call for more oil comes despite its own record-setting production.
Global benchmark, Brent crude shed 79 cents, or 1.1 per cent, to $74.59 a barrel, aiming for the lowest settlement since May 8.
West Texas Intermediate crude fell 94 cents, or 1.4 per cent, to $64.58 a barrel on the New York Mercantile Exchange, poised for the lowest finish since April 9.
OPEC will meet in Vienna on June 22 to decide whether the group and non-OPEC producers, including Russia, should raise output to make up for any supply shortfall from Iran and Venezuela.
Saudi Arabia and Russia were already discussing raising OPEC and non-OPEC oil output by around 1 million bpd, sources familiar with the matter said on May 25.
Global oil supply has tightened with the OPEC-led production cuts that began in early 2017.
Following the drop in oil price to an all-time low, OPEC and other major producers including Russia started to withhold 1.8 million barrels per day output in 2017 to rein in oversupply that had depressed prices since 2014.
The price of oil has been under pressure given the potential for a trade war escalating over Washington's pursuit of tariffs. Oil prices lost considerable ground in a US-Chinese tit-for-tat on tariffs in April and now the focus is on Europe.
The European Commission announced yesterday it endorsed a decision to impose duties on imported U.S. goods in response to US President Donald Trump's move on aluminum and steel tariffs.