VIENNA (AFP) – Oil prices dipped on Tuesday in nervousness ahead of a meeting of crude producers at OPEC headquarters in Vienna to discuss extending output cuts.
Brent Crude fell 43 cents to $63.41 in London while in New York fellow benchmark West Texas Intermediate (WTI) fell 30 cents to $57.81.
Until now market expectations have been for 24 oil producers to prolong their 2016 deal on Thursday reducing output by 1.8 million barrels per day until the end of 2018.
But reports said that non-OPEC member Russia has misgivings, fearing that oil prices above $60 a barrel will allow rivals in the US, who are outside the accord, to extract more oil and steal market share.
The deal among the OPEC and non-OPEC countries, first struck a year ago and which has already been extended until March 31, has borne fruit.
It has helped to reduce a global glut that had sent oil prices plummeting to less than $30 per barrel, tearing a hole in producers’ public finances.
Oil prices are now at a near two-year high, with Brent Crude close to $65 per barrel and WTI recovering to over $60.
Inventories have also fallen to more normal levels. Growing optimism about the global economy and its effect on buoying oil demand, not least from China, has also helped.
“The current market conditions, the returning level of confidence and optimism in the industry are all evidence of the outcome of our joint efforts,” Mohammad Sanusi Barkindo, OPEC secretary general, said on Monday.
According to Bloomberg News, members of the OPEC cartel and Russia have crafted the outline of an agreement to extend the curbs to the end of 2018.
Saudi Arabia is thought to be particularly keen since higher oil prices would help boost the value of national oil company Saudi Aramco, some of which it wants to sell next year.
OPEC and Russia are still hammering out crucial details, however, Bloomberg reported.