Oil prices changed slightly on Tuesday and remained close to their highest level in three months amid indications of a global supply decline due to production cuts by producing countries and strong demand in the United States, the world's largest fuel consumer. As of 01:35 GMT, Brent crude futures were at $85.30 a barrel, down 13 cents or 0.15% compared to the previous session's settlement price. The nearest expiration contracts for Brent crude reached their highest level in three months since April 13 on Monday.
U.S. West Texas Intermediate crude recorded $81.69 a barrel, down 0.1% or 11 cents from the previous session’s settlement price, which was its highest since April 14. Analysts at the National Australia Bank stated in a note on Tuesday, "Oil prices are on track to reach the highest price levels in 2023 from our perspective. The Organization of the Petroleum Exporting Countries (OPEC) meeting on Friday is a potential catalyst for expectations, as we anticipate the voluntary supply cuts in Saudi Arabia to be extended for another month."
Analysts expect Saudi Arabia to extend its voluntary oil production cut of one million barrels per day for another month to include September to provide additional support to the market during an online meeting with other major producers scheduled for Friday. In June, the OPEC+ alliance reached a broader agreement to cut oil supplies through 2024, with Saudi Arabia committing to an additional voluntary cut in July. On July 3, the Kingdom announced it would extend the voluntary cut to include August and that it might extend for additional months.
It was expected that crude oil and gasoline inventories in the United States would decline last week, according to a Reuters poll which estimated that crude inventories fell by about 900,000 barrels in the week ending July 28.
