The price of oil was marginally higher on Tuesday’s session. This is driven by the prospects of one more slump in the crude output of U.S. that outweighs a plan from the White House to trade almost half of the petroleum reserves along with on-going expectations that the supply reduction of OPEC will be extended.
Oil prices were lower earlier in the session as White House is considering selling almost half of United States’ 688 million-barrel oil inventory from next year to 2027 in an effort to support budget stabilization and raise $16.5 billion. The budget however is only a motion and will not change in its previous form.
OPEC is set to meet on Thursday in Vienna to talk about whether to extend the deal until December, which saw the organization along with 11, non-members favoring to reduce production as much as 1.8 million barrels per day in the first half this year. Oil kingpin Saudi Arabia agreed with the deal in a span of nine months instead the originally planned six months. This will avoid oil from slipping below the $50 per barrel handle and will further accelerate the stabilization of the market.
Essam al-Marzouq, oil minister from Kuwait, said that not everyone is in favor of the nine month extension. However representatives told Reuters that they projected a smooth meeting and the said nine-month extension could possibly be favored on.
Global benchmark Brent crude advanced by 34 cents and trades at $54.19 a barrel. U.S. light futures finished the trading day up by 34 cents at $51.47 a barrel. Meanwhile according to analyst’s poll, crude oil stockpiles in the country are projected to slide for seven consecutive weeks, falling more than 2.7 barrels in the week to May 19.
American Petroleum Institute is scheduled to release a stockpile report on Tuesday and the U.S. Department of Energy to announce figures on Wednesday.