WASHINGTON, D.C. (DTN) -- Oil futures nearest delivery on the New York Mercantile Exchange and Brent crude on the Intercontinental Exchange settled mixed Monday afternoon after the Organization of the Petroleum Exporting Countries over the weekend signaled an extension of production cut targets for the full year was countered by abundant U.S. supply, while geopolitical tensions continued to underpin prices.
Nymex June West Texas Intermediate futures settled $0.34 up at $63.10 bbl ahead of contract expiration Tuesday afternoon with the July contract settling with a modest $0.11 premium to the expiring contract. ICE July Brent dipped $0.24 at $71.97 bbl. Nymex June RBOB futures were down 3.74cts to finish the session at $2.0099 gallon, with June ULSD settling 2.19cts lower at $2.0736 gallon.
Monday's mixed session follows the conclusion of the Joint Ministerial Monitoring Committee over the weekend, when OPEC and non-OPEC representatives reviewed compliance with a six-month OPEC+ production agreement and debated policy options for balancing the global oil market.
OPEC's de facto leader Saudi Arabia along with Iraq and United Arab Emirates expressed support for extending a production cut agreement until the end of the year, while Russia reportedly advocated for reduced commitments. Saudi officials continue to see a surplus in global oil inventories, despite tightening U.S. sanctions on oil exports from two OPEC countries—Iran and Venezuela.
"Scenario that resonates the most is to roll over existing production targets," said Al-Falih after the meeting.
However, not everyone seemed to be on the same page with the Saudis, as Russian energy minister reportedly floated an idea of reducing collective cuts by 300,000 bpd, according to Reuters.
Russian Federation, a reluctant participant in OPEC+ accord lost nearly 37 million bbl of crude last month due to organic contamination issues, which continue to affect its exports today. Oil flow through a major export pipeline Druzhba has yet to recover to full capacity, while Russian crude production in the beginning of May dropped to 11.19 million bpd from 11.23 million bpd in April.
Paris-based International Energy Agency said last week commercial oil stocks held by the 36-country bloc Organization for Economic Cooperation and Development were drawn down 25.8 million bbl in March to 2.849 billion bbl, with the decline well above the five-year average. In the United States, crude supplies sit at a 20-month high at 472 million bbl, according to government data. U.S. crude stockpiles are currently 6.5% above the five-year average for this time of year.
American Petroleum Institute will publish supply figures for the week ended May 17 at 4:30 PM ET Tuesday, followed by official figures from the Energy Information Administration at 10:30 a.m. EDT Wednesday.
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