Oil Turns Sharply Down Amid OPEC Uncertainty

Oil reversed early gains and turned negative on Wednesday amid uncertainty about the supply policy of the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+.

Capping the downside, however, U.S. crude inventories are expected to fall for a seventh straight week. A failure of OPEC+ talks on Monday also means a planned output rise for August has yet to be agreed.

Brent crude dipped 76 cents, or 1%, to $73.77 per barrel, after slumping more than 3% on Tuesday. U.S. West Texas Intermediate shed 94 cents, or 1.3%, to trade at $72.43 per barrel, having declined by more than 2% in the previous session.

OPEC+, which also includes Russia and other producers, abandoned talks on Monday after three days of negotiations failed to close divisions between Saudi Arabia and the United Arab Emirates.

Disagreement among the producers could still prompt them to open the taps. Concerns about that prospect led to Brent to fall on Tuesday from a high of $77.84, the highest since 2018, and U.S. crude sliding from $76.98, the highest since 2014.

Away from OPEC+, the first of this week’s two reports on U.S. inventories, from the American Petroleum Institute, is due out at 4:30 EDT. Analysts expect stocks to fall by 3.9 million barrels.