Mubasher: Oil prices fell on Thursday as Iran suggested that it may back a small increase in crude production from the Organization of Petroleum Exporting Countries (OPEC), paving the way for agreement on raising oil output during a meeting scheduled for Friday, 22 June.

Nevertheless, strong fuel demand in the US, as indicated in record refinery runs, positive travel data, and a steep decline in crude inventories, limited the price drop.

US Nymex futures shed 0.3% to $65.50 per barrel (pb) early on Thursday from their last session, while global Brent crude futures traded at $74.34 pb, 0.5% down from their last settlement.

On Wednesday, Iran, a major OPEC producer, signalled that it could agree on a little increase during the group’s meeting in Vienna with non-OPEC ally Russia, suggesting that the major OPEC producer is yielding for the pressure to boost production.

While the trading head of Singapore-based futures brokerage OANDA’s Aisa-Pacific Stephen Innes sees “an air of confidence that this deal will move through,” analysts do not expect a harmony among the group in their anticipated meeting.

“Our expectations are for a tense, discordant and highly geopolitical OPEC+ [OPEC and non-OPEC producers] meeting,” Reuters reported, citing Japan’s Mitsubishi UFJ Financial Group as saying in a note.

On the other hand, US refineries posted a seasonal record of 17.7 million barrels per day (bpd) last week, as reported by the Energy Information Administration (EIA) on Wednesday, while the American Automobile Association on Thursday expected that a record 46.9 million US citizens to travel during the next 4 July holiday, both indicating a resilient fuel demand.

Moreover, US crude inventories posted a drop of 5.9 million barrels in the week ended 15 June to 426.53 million bpd.

By 7:14 am GMT, US Nymex went down 0.61% to $65.31 pb, while international Brent dropped 1.07% to $73.94 pb.