Oil Prices Contract Ahead of Inventory Data

West Texas Intermediate (WTI) crude oil futures for delivery in July were 1.1% lower at $49.25 per barrel during Tuesday’s pre-market trading session while Brent oil futures for delivery in July were down by 1.7% at $51.74 per barrel. The pre-bell price declines come ahead of the release of inventory projections later in the day and coincide with a fractionally lower greenback. As a dollar-denominated commodity, a cheaper buck tends to make oil more affordable for international buyers. The Dollar Index, which tracks the value of the U.S. currency against a basket of foreign currencies, was 0.13% lower at the time of writing.

Members of the Organisation of the Petroleum Exporting Countries (OPEC) last week confirmed a nine-month extension for a curb on oil output, which was put in place at the start of the year. Members of OPEC originally agreed on Dec. 10 to collectively lower their daily production of oil by 1.8 million barrels per day starting on Jan. 1 for an initial period of six months.

By Chris Robinson