Benchmark indices for crude oil were mixed throughout much of the previous session after reports circulated that the United States was calling for more oil from the Organization of Petroleum Exporting Countries tacitly to protect against steady declines from Venezuela and possible declines from Iran. Washington last pressed Saudi Arabia to increase output in 2012.
Crude futures already had slipped as worries about oversupply ahead of a potential OPEC production increase offset signs that Venezuela would halt some crude exports.
"Oil prices are being clobbered by a surprise build to crude stocks as total imports jumped higher, blunting the impact of higher refinery runs", said Matthew Smith, director of commodity research at ClipperData in Louisville, Kentucky.
Prices had traded higher in early dealings, buoyed by reports Venezuela may not deliver some of its contracted crude oil exports on the heels of political upheaval. The deal is due to expire at the end of 2018.
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"OPEC will not bow and obey" to USA pressure to increase oil production, said Hossein Kazempour Ardebili, one of Iran's representatives to the organization.
But Opec is signalling it could increase output, and the danger of a global trade war has just bubbled up again as a threat to demand.
Mexican oil output could return to 2 million barrels per day (bpd) by about 2022 from 1.886 million bpd in April if the next government pursues plans to auction off development blocs to private investors, Energy Minister Pedro Joaquin Coldwell said on Tuesday. US oil production is up 1.5 million bpd from a year earlier. Prices have been trading under pressure following comments from Russian Federation and Saudi Arabia that they could consider curbing their output cuts when they meet on June 22.
"A consensus for higher oil prices and revenues will be the bedrock of every OPEC nation".
Aramco raised pricing for all grades to Northwest Europe and the Mediterranean region and for most crudes to the USA, where only Extra Light was left unchanged. The increase shows that lack of supply that is coming from OPEC crude relative to supply from US production.
The group meets in Vienna on June 22 to discuss its supply policy. Market participants are also anticipating a softening in supply limits from OPEC and Russian Federation at their meeting on June 22, to offset supply outages in Venezuela.