Oil steadies on supply risks, OPEC+ output increase

Oil prices held steady on Wednesday after the U.S. barred Chevron from exporting crude from Venezuela, but an expected decision from OPEC+ later this week to increase production in July capped gains.

Brent crude futures was up 6 cents, or 0.1%, to $64.15 a barrel by 0852 GMT, while U.S. West Texas Intermediate crude gained 8 cents, or around 0.2%, at $60.99 a barrel.

The Trump administration has issued a new authorization for U.S.-major Chevron that would allow it to keep assets in Venezuela but not export oil or expand activities, Reuters reported on Tuesday citing sources.

The downside in oil was also limited by production shutdowns and evacuations in Canada’s Alberta province due to a wildfire, and talk of further sanctions on Russia by the U.S., said PVM analyst Tamas Varga.

However the possibility OPEC+ may decide to increase production at a meeting this week limited gains in price.

A full meeting of the Organization of the Petroleum Exporting Countries and allies, together known as OPEC+, is scheduled for Wednesday.

A July output hike could be decided on Saturday when eight members of the group hold talks, according to sources.

Despite this, prices could respond positively in coming weeks and months if there is progress on global trade talks or resolving U.S.-Iranian frictions, said Tim Waterer, chief market analyst at KCM Trade in a note.

Iran’s nuclear chief Mohammad Eslami said on Wednesday it might allow the U.N. nuclear watchdog to send U.S. inspectors to visit Iranian nuclear sites if Tehran’s nuclear talks with Washington succeed.

Source : Reuters