Oil prices fell below $99 a barrel on Wednesday in Asia, amid signs of OPEC raising its crude production quotas at a meeting in Vienna.
Benchmark oil for July delivery was down 43 cents to $98.66 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract added 8 cents to settle at $99.09 on Tuesday.
In London, Brent crude for July delivery was down 63 cents to $116.15 a barrel on the ICE Futures exchange.
Investors will be closely watching the outcome of a meeting of the Organization of Petroleum Exporting Countries, a cartel that controls about 40 percent of global crude output, later on Wednesday.
OPEC leaders have been split this week over whether they should raise production. Saudi Arabia, the group’s biggest supplier, has supported a price between $70 and $80 while Iran, the second-largest producer in OPEC, is against any output hike.
“Suggestions of a quota increase of between 1 million and 1.5 million barrel per day now appears likely,” Ritterbusch and Associates said in a report.
Signs of strong U.S. crude demand provided a floor for prices.
The American Petroleum Institute said late Tuesday that crude inventories fell 5.5 million barrels last week, more than the drop of 1.5 million barrels predicted by analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos.
Inventories of gasoline declined 161,000 barrels last week while distillates rose 1.8 million barrels, the API said.
The Energy Department’s Energy Information Administration reports its weekly supply data later Wednesday.
In other Nymex trading in July contracts, heating oil fell 2.6 cents to $3.05 a gallon and gasoline dropped 2.0 cents to $2.97 a gallon. Natural gas futures slid 3.2 cents to $4.80 per 1,000 cubic feet.
