LONDON – Oil fell further below $85 a barrel on Tuesday, but it was still not far from a three-year high in choppy trade ahead of weekly U.S. supply reports expected to show a rise in crude inventories and of Thursday’s OPEC+ meeting.

Oil falls to $84 before U.S. inventories and OPEC+ meeting- oil and gas 360

Source: Reuters

Analysts in a Reuters poll expect U.S. crude inventories to have increased by 1.6 million barrels [EIA/S]. Industry group the American Petroleum Institute releases the first of this week’s two supply reports at 2030 GMT.

Brent crude was down 68 cents, or 0.8%, at $84.03 a barrel by 1340 GMT, while U.S. West Texas Intermediate (WTI) crude fell 65 cents, or 0.8%, to $83.40.

“The oil rally faces some headwinds this week,” said Jeffrey Halley of brokerage OANDA. “Oil looks very much like it is going to range-trade ahead of the OPEC+ meeting on Thursday although pre-meeting rumours will lead to some intraday volatility.”

The price of Brent has surged more than 60% in 2021, hitting a three-year high of $86.70 last week as demand recovers and the Organization of the Petroleum Exporting Countries and allies led by Russia, or OPEC+, slowly unwinds record output cuts.

Ahead of Thursday’s meeting, OPEC+ is under pressure from consumers to do more to cool the market. But the alliance is expected to stick to its plan for gradual, monthly production increases of 400,000 barrels per day.

In a sign that high prices are encouraging more supply elsewhere, BP said on Tuesday it will ramp up investments in its onshore U.S. shale oil and gas business to $1.5 billion in 2022 from $1 billion this year.

Oil was up earlier on Tuesday, supported by the slow ramp-up in OPEC supplies. A Reuters survey found on Monday the increase in OPEC’s output in October undershot the rise planned by OPEC+ due to involuntary outages in some producers.

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