Oil falls ahead of US crude inventories data

Oil prices continued to fall as the US market opened on Tuesday, as the US crude pulled back from a 3-year high and Brent from a 2-year high on profit-taking and expectations that OPEC-Plus countries will increase supply to meet the recovering global demand, and ahead of preliminary data on the US crude inventories.

US crude fell 0.75% to $72.49 a barrel, after opening at $73.03, and hit a high at $73.33, and Brent crude fell 0.6% to $74.34 a barrel, after opening at $74.81, and hit a high and the highest since April 2019 at $75.29.

The US crude gained 3% yesterday, and hit a 3-year high at $73.94, in the second straight daily gain, and Brent crude rose more than 2.9%.

These gains came after fears over the return of the Iranian exports receded due to the suspension of the Iranian nuclear talks following the election victory of the hardline Iranian president Ebrahim Raisi.

Sources in OPEC-Plus said that the coalition is considering an increase in oil output starting August, but no decision has been taken on quantities.

The International Energy Agency has recently stated that the OPEC-Plus needs to increase output to meet the recovering global demand, and to maintain global oil supply in markets.

Goldman Sachs has also projected that the price of Brent crude will rise to $80 a barrel this summer, thanks to the ongoing Covid vaccination campaigns and the global economic recovery.

The American Petroleum Institute will release its preliminary data on US crude inventories later today, and the Energy Information Administration will release its official report on Wednesday.