SINGAPORE Oil prices were very sluggish on Wednesday after gaining more than 3 per cent in the previous session ahead of a meeting of OPEC producers to discuss a big cut in crude output.
Traders said the stronger dollar was the main reason behind the slightly easier prices, as it reduced demand from buyers using other currencies.
The price of crude fell 22 cents, or 0.2 per cent, to $91.58 a barrel at 0427 GMT, after climbing $2.94 in the previous session.
U.S. West Texas Intermediate WTI crude futures fell 29 cents, or 0.3 per cent, to $86.23 a barrel after gaining $2.89 in the previous session.
The Organization of the Petroleum Exporting Countries OPEC and allies led by Russia will be in Vienna later on Wednesday to talk about output cuts of up to 2 million barrels per day bpd, according to an OPEC source.
A cut of that magnitude would be the biggest made by OPEC since demand was hit by COVID 19 in 2020.
I will not be surprised if buy the rumour, sell the fact could happen, since the strong rallies in crude prices may have priced in such a production cut, said Tina Teng, an analyst at CMC Markets.
A source familiar with the matter told Reuters that the United States is pushing OPEC producers to avoid deep cuts, as President Joe Biden looks to prevent a rise in U.S. gasoline prices.
There is no real impact on supply from a lower output target, as several OPEC countries are already pumping well below their existing quotas. In August, OPEC missed its production target by 3.58 million barrels per day.
A decision on big cuts would send a strong message that the group is determined to support the market, ANZ Research analysts said in a note. American Petroleum Institute figures show that U.S. crude oil stocks fell by about 1.8 million barrels for the week ending Sept. 30, according to market sources.