Investing.com – Oil prices were flat in morning trading Wednesday as uncertainty about when OPEC would meet and what that means for production cuts overshadowed an unexpected drop in U.S. stockpiles.
WTI futures was unchanged at $36.81 per barrel.
London-traded Brent, the global benchmark, lost 0.3% to $39.46.
OPEC was reportedly looking to meet virtually as early as tomorrow, with Saudi Arabia and Russia indicating they would extend existing production cuts.
But a report today said Saudi Arabia was now looking to propose a mid-June meeting.
Meanwhile, stockpiles of U.S. crude fell unexpectedly in the latest week, the Energy Information Administration said.
Oil inventories dropped by 2.1 million barrels for the week ended May 29, the EIA said. That compared with expectations for a rise of about 3 million barrels, according to forecasts compiled by Investing.com.
“It’s a dataset that really questions the dubious base on which this rally has been built,” Investing.com analyst Barani Krishnan said. “You have a 2-million-barrel decline in crude and that nicely tees up with the 1.8-million-barrel decline at the Cushing hub. But you also have a 4 million-barrel build on the SPR.”
Gasoline inventories rose by 2.8 million barrels, versus forecasts for a rise of about 1 million barrels. Distillate stockpiles soared by 9.9 million barrels, compared with expectations for a build of about 2.7 million barrels.
“For all the hurrah made over gasoline demand, we have a build of 2.8 million barrels,” Krishnan said. “And distillates continue to draw tears from the trade, with another near 10-million-barrel build. Distillate inventories alone have risen by over 50 million barrels the past eight weeks.”
“It’s quite insane that we can ignore all these while continuing to salivate on when the OPEC meeting will happen and what it will bring, a longer agreement for cuts, which the market expects anyway,” he added.
“To me, the only real positive here is the continued decline in production, now estimated at 11.2 million barrels per day or nearly 2 million off the mid-March record highs of 13.1 million bpd.”