Crude oil futures were slightly higher in Asian trade Tuesday, but prices remained rangebound for much of the day as investors were cautious ahead of key events this week.
The Organization of Petroleum Exporting Countries, or OPEC, is due to meet in Vienna starting Wednesday and officials are expected to leave output quotas unchanged despite signs of a growing oversupply in the market because of sluggish global demand and rising non-OPEC supplies.
Brent crude prices have almost tripled from the lows four years ago, when the oil cartel was spurred into a massive output cut in late 2008 in response to a plunge in oil prices in the midst of the global economic crisis. This time around, though, the group faces dwindling demand for its oil and rising production in the U.S, the world's largest oil consumer.
In any case, Brent crude prices remain well above the $100-a-barrel mark, the level that OPEC's largest producer deems desirable, which is sapping impetus for a cartel-wide change in output quotas.
But ahead of the meeting, commodity pricing agency Platts reported OPEC's production in November fell by about 90,000 barrels a day to 31.17 million barrels a day. While this remains a million barrels above the group's output ceiling of 30 million barrels a day set last year, the production number was the lowest since February, suggesting a global supply glut could prompt member countries to lower output further.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in January traded at $85.70 a barrel at 0643 GMT, up $0.14 in the Globex electronic session. January Brent crude on London's ICE Futures exchange rose $0.20 to $107.53 a barrel.
Crude prices will also take cues from Wednesday's meeting of the Federal Open Market Committee, where the policy setting panel of the U.S. central bank could decide to launch fresh steps to stimulate the U.S. economy. The decision could move the U.S. dollar against other currencies and affect oil prices, which tends to move in the opposite direction of the dollar.
U.S. oil inventory data due out Wednesday could also impact prices this week. Crude oil stockpiles likely fell 1.7 million barrels last week as refiners boosted operations, according to a Dow Jones Newswires survey of analysts. The figures also are expected to show snug gasoline and distillate (diesel/heating oil) inventories rose by 2.5 million and 1.5 million barrels, respectively.
Nymex reformulated gasoline blendstock for January--the benchmark gasoline contract--rose 36 points to $2.6017 a gallon, while January heating oil traded at $2.9078, 116 points higher.
ICE gasoil for December changed hands at $900.00 a metric ton, down $3.75 from Monday's settlement.