Oil fell in muted trading on Thursday ahead of the start of OPEC meetings later in the day, steadying after the previous session’s steep gains on a sharp drop in U.S. crude inventories and expectations of more output cuts.
Brent crude futures dipped 10 cents, or 0.2 percent, to $62.90 a barrel by 0112 GMT. Brent surged 3.6 percent on Wednesday.
West Texas Intermediate (WTI) crude futures fell 22 cents, or 0.4 percent, to $58.21 a barrel. They settled up 4.2 percent on Wednesday.
Prices are now back roughly to the levels of a week ago, before they plunged on a lack of progress on resolving a 17-month-old China-U.S. trade war that has hit global growth and demand for oil.
Investor attention has switched to meetings of the Organization of the Petroleum Exporting Countries (OPEC) and allies that start later on Thursday, and the possibility of more production cuts.
The so-called OPEC+ group has been curbing output since 2017 to counter surging production from the United States, which is now the world’s biggest oil producer.
OPEC is aiming to push for deeper reductions in output but needs the agreement of Russia and other oil producers to avoid a supply glut next year, after demand growth slowed in 2019.
“The most likely outcome of the OPEC+ meetings this week is an agreement to reduce production by another 300,000-400,000 barrels per day (bpd), conditioned on greater compliance by countries that have failed to honor their commitment,” Eurasia Group said in a note.
OPEC members meet in Vienna on Thursday and are then joined by Russia and the other members of the wider grouping on Friday. OPEC+ has been withholding about 1.2 million barrels per day of production.
U.S. President Donald Trump on Wednesday described trade talks with China as going “very well,” after the day before saying it could take until after next year’s presidential election to complete an agreement.
Oil prices surged on Wednesday after U.S. crude inventories fell by much more than expected, according to official figures.
Crude stockpiles fell by 4.9 million barrels last week, the Energy Information Administration said on Wednesday, compared with expectations in a Reuters poll of a 1.9 million-barrel decline.
Still, gasoline and distillate stocks surged by a similar amount as crude’s decline, with refinery runs increasing ahead of winter stockpiling.
Gasoline stocks were up by 3.4 million barrel, double expectations in the Reuters poll. Distillate inventories jumped by nearly three times expectations, gaining 3.4 million barrels.