Investing.com-- Oil prices fell slightly in Asian trade on Tuesday after rebounding sharply over the past three sessions, as anticipation of more Federal Reserve cues and speculation over production cuts by major suppliers kept sentiment muted.
Crude prices had surged a cumulative $5 a barrel in the past three sessions after tumbling to four month lows in the prior week. Pressure on prices came chiefly from a string of weak economic readings from across the globe, which raised concerns over slowing demand.
But the losses in oil prices drove speculation that the Organization of Petroleum Exporting Countries will trim production further when it meets on November 26. Media reports also suggested that certain members of the producer group- specifically Russia and Saudi Arabia- were considering extending their current supply curbs into 2024.
Analysts said that any more production cuts by the two will likely tighten supply and support prices going into 2024. Saudi and Russian production cuts earlier this year were a major point of support for oil prices, helping them weather headwinds from weak economic signals.
Brent oil futures fell 0.2% to $82.13 a barrel, while West Texas Intermediate crude futures fell 0.1% to $77.77 a barrel by 20:48 ET (01:48 GMT). Both contracts saw some profit taking after three straight days of strong gains.
Markets were now awaiting concrete signals that the OPEC intended to trim supplies. But before that, key economic signals, particularly from the Federal Reserve, were in focus.
Fed minutes awaited, dollar battered by rate pause bets
Weakness in the dollar- which sank to 2-½ month lows- was also a major support point for oil and other commodities priced in the greenback.
A drop in the dollar came as traders priced in bets that the Fed was done raising interest rates, and could potentially begin cutting rates by as soon as March 2024.
The minutes of the Fed’s late-October meeting- which were due later on Tuesday- were expected to shed more light on this notion, especially as the Fed offered signals which were considered as somewhat dovish during the meeting.
But while a less hawkish Fed is expected to be conducive towards oil demand, signs of a rapidly cooling economy also put traders on edge over a U.S. economic slowdown next year, which could severely dent demand.
Concerns over China- which is grappling with a sluggish economic recovery- also chipped away at oil markets, especially as recent data showed little improvement through October.
Data showing record-high U.S. oil production, coupled with increased production by other OPEC members also showed that crude markets were not as tight as initially expected.