However, prices were prevented from dropping further by robust U.S. fuel demand seen in record refinery runs, strong travel data and a large decline in crude inventories.
Brent crude futures LCOc1 were at $74.33 per barrel at 0426 GMT, down 41 cents, or 0.55 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $65.50 a barrel, down 21 cents, or 0.3 percent.
Iran, a major supplier within the producer cartel of the Organization of the Petroleum Exporting Countries (OPEC), signaled on Wednesday it could agree on a small increase in the group’s output during a meeting to be held at OPEC’s headquarters in Vienna on June 22 together with non-OPEC member but top producer Russia.
“There appears to be an air of confidence that this deal will move through,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.
“We expect OPEC and Russia to gradually add supplies back to the market by next year, mostly offsetting the almost 1 million barrels per day (bpd) supply disruption in Venezuela,” Barclays bank said.
Tehran had previously resisted pressure by OPEC’s de-facto leader Saudi Arabia to raise output.
Even with Iran appearing to fall in line, analysts do not expect a harmonious OPEC meeting.
“Our expectations are for a tense, discordant and highly geopolitical OPEC+ meeting,” said Japan’s Mitsubishi UFJ Financial Group in a note to clients.
OPEC, together with other key producers including Russia, started withholding output in 2017 to prop up prices, but a tightening market in 2018 led to calls by major consumers for more supplies.
In a sign of strong demand, U.S. refineries processed a seasonal record of 17.7 million bpd of crude oil last week, according to data from the Energy Information Administration (EIA) said on Wednesday.
This comes as a record 46.9 million Americans are expected to travel during the upcoming July 4 holiday, according to the American Automobile Association on Thursday, which is seen as a leading indicator for U.S. fuel demand.
Amid healthy consumption, commercial U.S. crude inventories dropped by 5.9 million barrels in the week to June 15, to 426.53 million barrels C-STK-T-EIA, the EIA said.
U.S. crude oil production C-OUT-T-EIA was flat week-on-week, remaining at a record 10.9 million bpd.
Beyond the short-term, Barclays said there were headwinds for oil prices.
“Deleveraging in China and a weakening in the narrative around synchronous global economic growth are likely to add headwinds for all commodities,” it said.
More about: #oil
