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Oil slips to $71, hit by talk of higher OPEC+ output

Oil slips to $71, hit by talk of higher OPEC+ output

LONDON: Brent oil slipped to around $71 a barrel on Tuesday, pressured by expectations of higher US inventories and concern about Russia’s willingness to stick with OPEC-led supply cuts.

Analysts, on average, expect US crude stockpiles to have risen by 1.9 million barrels last week, the fourth straight increase. The first of this week’s stockpile reports was due at 2030 GMT from the American Petroleum Institute.

“We have already seen these inventories going higher in the last week’s print,” said Naeem Aslam, Chief Market Analyst at TF Global Markets in London. Oil rally pauses with focus on supply direction

“The rising inventory data has raised many questions for investors – no one wants to see the oil glut again.”

Brent crude, the global benchmark, was down $0.04 at $71.14 a barrel at 1104 GMT. US West Texas Intermediate (WTI) crude gained $0.06 to $63.46.

While OPEC-led supply cuts have boosted Brent by more than 30% this year, gains have been limited by worries that slowing economic growth could weaken demand for fuel.

Oil also fell on Monday after comments from Russia raised concern the OPEC-led supply-cut pact may not be renewed. Russia and the producer group may decide to boost output to fight for market share with the United States, Tass news agency сited Finance Minister Anton Siluanov as saying.

Gas prices likely to be increased by 75% to 80%

The Organisation of the Petroleum Exporting Countries (OPEC) and other producers including Russia, an alliance known as OPEC+, have been cutting output since January 1. They will decide in June whether to continue the arrangement.

“There is a growing concern that Russia will not agree on extending production cuts and we could see them officially abandon it in the coming months,” said Edward Moya, senior market analyst at Oanda.

Russian officials sent mixed signals over renewal of the deal with OPEC last time it was being renegotiated in December, before finally agreeing to remain on board.