By Neanda Salvaterra, Dan Strumpf and Alison Sider
Oil prices edged down Wednesday, as investors cashed in on earlier gains ahead of a meeting of major oil producers about a proposed deal to scale back production, and after an industry group reported a larger than anticipated increase in U.S. crude supplies.
U.S. crude futures were down 36 cents, or 0.79%, at $45.45 a barrel on the New York Mercantile Exchange. Brent, the international benchmark, fell 32 cents, or 0.68%, to $46.63 a barrel on ICE Futures Europe.
Crude prices recently came down from a rally that had been motivated by increased diplomatic efforts from major oil producers, fueling expectations that the Organization of the Petroleum Exporting Countries will come to an agreement about cutting production at its Nov. 30 meeting. Bets around the outcome have driven moves in prices over the past few weeks.
"The market got short last week, and they're concerned about having a surprise announcement coming out of OPEC where the Saudis decide it's in their own best interest to have a production cut even if they can't get everyone to agree," said Andy Lipow, president of Lipow Oil Associates in Houston. "The market is looking to see if OPEC wants to maintain its relevancy and actually do something substantial and concrete about the current oversupply situation."
Traders are also looking ahead to upcoming data on U.S. inventories from the Energy Information Administration, on Wednesday. That data is expected to show inventories rising 1.1 million barrels in the week ended Nov. 11, according to a survey of analysts by The Wall Street Journal. Refineryuse is seen rising 0.8% on average to 87.9% of capacity.
The American Petroleum Institute said late Tuesday that oil stockpiles last week rose 3.7 million barrels. Gasoline stocks fell 155,000 barrels, while distillate stocks rose 3 million barrels, according to a market participant.
OPEC members have proposed trimming collective output to between 32.5 million and 33 million barrels a day. The cartel pumped a record 33.83 million barrels a day in October.
The latest diplomatic push is expected later this week, with a coming meeting planned between Saudi Arabia's energy minister and his Russian counterpart, according to people familiar with the matter.
Overall oil demand isn't going to abate soon, the International Energy Agency said in a report Wednesday.
Despite pledges made at the Paris climate change summit last year to cap greenhouse-gas emissions, global oil demand won't reach its peak before 2040 because thereare few alternatives to power transportation, said the IEA.
Gasoline futures fell 0.75 cents, or 0.56%, to $1.3275 a gallon. Diesel futures fell 0.91 cents, or 0.63%, to $1.4348 a gallon.
--Selina Williams contributed to this article.
Write to Neanda Salvaterra at firstname.lastname@example.org, Dan Strumpf at email@example.com and Alison Sider at firstname.lastname@example.org
(END) Dow Jones Newswires
November 16, 2016 10:21 ET (15:21 GMT)
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