Oil slipped after Russian Federation was said to propose that OPEC and other producers in a global alliance reverse the supply cuts they've been making since early previous year.
The U.S.is putting pressure on OPEC members to increase production as global benchmark prices flirt with US$80 a barrel, raising pump prices in the months before the U.S. votes in midterm elections that could decide which party controls Congress.
In terms of supply, two big variables are Venezuela and Iran.
Since early in 2017, however, OPEC has coordinated with Russian Federation, another oil-exporting country that is not an OPEC member, to try to regulate global supplies. "The world economy is feeling some pain from higher oil prices", the IEA commented in its latest market report, adding "Increasing trade tensions are the main risk to our oil demand forecast".
Oil prices have risen about 60 percent since a year ago after the Organization of Petroleum Exporting Countries and other oil producers, including Russian Federation, began reducing output to cut excess supply, Reuters reported. "Put the exports of crude on top of that, and it's just a really bullish report".
Total OECD commercial oil stocks-OPEC's current gauge of the oil market rebalancing-were 26 million barrels below the latest five-year average, as per preliminary data for April.
OPEC will meet on June 22 in Vienna, Austria, to discuss future production policy. Russia's production was 11.1 million barrels a day in June, exceeding its quota, according to sources familiar with the matter.
"More oil from OPEC plus is the base case", said Bjarne Schieldrop, analyst at Swedish bank SEB.
But the International Energy Agency said it believes the prices are unlikely to rise as sharply as they have in the past few months, CNBC reported.
In the letter, the senators said a run-up in oil prices is "effectively a tax on every American family's discretionary budget" since the price of oil directly affects the price of gasoline. American oil production has jumped by nearly a third in the last two years to a record 10.8 million barrels per day.
Fund manager Pierre Andurand at Andurand Capital is bullish.