LONDON (Reuters) – Oil prices fell on Wednesday due to doubts over Russia's willingness to substantially extend an agreement to halt production among some of the world's largest exporters in order to face the oversupply global and increase prices.
Brent crude futures were down 34 cents on the day to $ 63.27 the barrel at 0948 GMT, while US light crude fell 31 cents to $ 57.68 a barrel.
Oil prices have risen 40 percent since the middle of the year, backed by an agreement between the Organization of the Petroleum Exporting Countries (OPEC) and other major exporters, such as Russia, to reduce oil production by 1, 8 million barrels per day (bpd).
The agreement expires in March 2018, but is expected to be extended at the next OPEC meeting on November 30.
But the length of the extension remains an open question and this has kept the market on alert.
"The long-awaited meeting of tomorrow should be a formality (…) However, this narrative has not been in accordance with the script," said Stephen Brennock, badyst at the PVM brokerage.
Although the group is expected to extend supply cuts through the end of 2018, it is likely to include an option to review the agreement in June, OPEC sources said on Tuesday, after Moscow expressed concern that the market could overheat.
"They plan to extend to 2018 but with the option to review the decision in June, that is, they agree not to agree on anything," said Ralph Leszczynski, head of research at the Bancosta shipping broker in Singapore.
Russia is concerned that a more robust extension could lead to the oil price recovering too much, badysts said, which would send its currency higher and hurt exports. It is also concerned that a sharp increase in prices could trigger an increase in US production. UU
The growth in the production of EE. UU It has partially offset the momentum of the OPEC supply agreement.
A report by the American Petroleum Institute (API) showed on Tuesday that US crude inventories increased by 1.8 million barrels in the week ending November 24 to 457.3 million barrels, frustrating the expectations of a fall of 2.3 million barrels.
"The market had been waiting for a support number due to the interruption of the Canadian pipeline," said Ole Hansen, senior manager at Saxo Bank.
"However, the general level of inventory still managed to rise".
The price increase caused by the closure of the Keystone pipeline, which supplies Canadian crude to the United States, proved short-lived, with an announcement on Tuesday of a gradual resumption of operations.
Report of Henning Gloystein; Additional reports by Keith Wallis; Edition by Joseph Radford and Louise Heavens