Investing.com - Crude oil drifted lower in Asia on Friday ahead of the long Memorial Day weekend in the U.S. as investors stay cautious ahead of next week's OPEC meeting in Vienna.
On the New York Mercantile Exchange, WTI crude for June delivery eased 0.20% to $49.38 a barrel. Markets in the U.S. will shut on Monday for the Memorial Day holiday that traditionally kicks off the summer driving season that spurs gasoline demand.
Overnight, crude futures cleared the $50 hurdle for the first time since October on Thursday, before falling back to close slightly lower for the session, as investors responded to reports of further supply disruptions in Nigeria and growing Asian demand for Saudi Arabian oil.
On the Intercontinental Exchange (ICE), Brent crude for July delivery wavered between $49.27 and $50.51 a barrel, before closing at $49.55, down 0.19 or 0.38% on the day. Both the international and U.S. benchmarks of crude are up sharply since negotiations at a highly-anticipated summit between OPEC and Non-OPEC producers collapsed last month.
Crude also rose after a group of militant avengers in the Niger delta region of Southern Nigeria claimed responsibility for an attack that shut down Chevron 's (NYSE:NYSE:CVX) oil facility in the area.
It was the latest assault against a major oil company by the Niger Delta Avengers, a local group that has targeted global energy companies in an attempt to defend the environment. The recent disruptions to Chevron and Exxon Mobil (NYSE:NYSE:XOM) pipelines in Nigeria have reduced nationwide production to its lowest levels in 20 years.
Crude prices then retreated in U.S. morning trading as reports from Reuters surfaced that Saudi Arabia has offered larger quantities of crude to customers in Asia after a series of oilfield maintenance initiatives were completed earlier this week.
As a result, Saudi Aramco plans to increase output by as much as 1 million barrels per day in the next two weeks, sources told Reuters. When OPEC convenes for a semi-annual meeting next week in Vienna, the 13-member nation is not expected to come to terms on any agreement that could lead to a comprehensive production freeze.
Despite the recent upswing in oil prices, crude is still down by approximately 60% from its level two years ago when it peaked above $100 a barrel. In November, 2014, OPEC roiled global energy markets by altering its strategy to favor market share over price gains. Ever since, prices have fallen precipitously as supply continues to severely outpace demand.
Investors continued to digest a bullish supply report from the previous session when the U.S. Energy Information Administration (EIA) said commercial crude inventories fell by 4.2 million barrels for the week ending on May 20 in comparison with the previous week.
At 537.1 million barrels, U.S. crude oil inventories are still at historically high levels for this time of year. Production, meanwhile, fell by 24,000 barrels per day to 8.791 million bpd, remaining near lows from September, 2014. Crude output across the U.S. has declined in 18 straight weeks.