Prices of oil recovered on expectations of a lower U.S. supply, but the likelihood of a higher OPEC output threatens oil prices

Oil futures

Buoyed by the markets expectations over the possibility of a lower United States output, prices of oil recovered on Tuesday. Brent crude futures, managed to rise by over 0.19% or 13 cents and was seen settling at $75.43 per barrel, which hovers above its $75.29 settlement on Monday. Meanwhile, the United States West Texas Intermediate settled at $65.07 per barrel, which was 0.49% or 32 cents higher from their last close.

The stance of prices of oil were due to the expectations of analysts and investors that there is a possibility that U.S. crude supplies may decline soon. Stephen Innes, head of trading for Asia-Pacific at OANDA in Singapore mentioned that oil supply is one of the major key essentials that drives oil prices higher or lower.

The expectations of possible decline from U.S. output gives oil prices a boost, which led to a recovery from recent lows. However, Stephen Innes highlighted that the increasing U.S. production and the likelihood of a higher output from the Organization of Petroleum Exporting Countries is still putting pressure on the market, particularly on oil prices.

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