Oil prices edged down on Monday as traders took profits, with the Organisation of the Petroleum Exporting Countries (OPEC) considering meeting as soon as this week to discuss whether to extend record production cuts beyond end-June.
Brent crude LCOc1 fell 15 cents, or 0.4 per cent, to $37.69 a barrel, in the first day of trading in the contract with August as the front month.
The price falls come after front-month Brent and WTI prices posted their strongest monthly gains in years in May.
“We might see a cautious pullback in (crude) prices given that downstream prices haven’t caught up … but if OPEC+ does come up with a three-month extension, there’s a possibility that prices may hit the $40 level,’’ Lee said.
Saudi Arabia is proposing to extend record cuts from May and June until the end of the year, but has yet to win support from Russia, sources have told Reuters.
Algeria, which currently holds the OPEC presidency, has proposed that an OPEC+ meeting planned for June 9-10 be brought forward to facilitate oil sales for countries such as Saudi Arabia, Iraq and Kuwait.
Russia has no objection to the meeting being brought forward to June 4.
“It’s been widely interpreted as likely to lead to an extension of the current production cuts,’’ CMC Markets’ Chief Market Strategist, Michael McCarthy, said.
“Oil prices have come down slightly in our session but they’re still at elevated levels.
“I suspect that’s the key driver of prices on Friday night and should keep prices reasonably well supported today.’’