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Nov 28 2017, 01:16 PM (+06) | Fortfs.com

Oil futures went down in Asian hours on Tuesday amid increasing doubts over a potential extension of output cuts by OPEC and as the US-Canada Keystone pipeline restarts.

 

The US West Texas Intermediate crude contracts were down 0.62 percent to $57.675 per barrel as of 06:35 GMT. Meanwhile, Brent futures dropped 0.34 percent to $63.62 a barrel.

 

TransCanada Corp said earlier it would restart the Keystone pipeline at reduced volumes on Tuesday once it gets green light from US controllers. The pipeline usually transports 590,000 barrels per day from Canada’s oil sands to major US refineries.

 

Investors are focusing on the upcoming OPEC meeting in Vienna on November 30, where the oil cartel and its allies will discuss a possible extension of output cuts beyond March 2018.

 

Uncertainty over Russia's position in the deal has weighed on sentiment, as it remains unclear whether the Kremlin wants to keep sacrificing market share to keep prices up.

 

Russian Economy Minister Maxim Oreshkin recognized that the country’s economy has been negatively affected by the production cuts, which currently stand at 300,000 bpd.

 

"We view risks to oil prices as skewed to downside this week as we believe current prices, timespreads and positioning already reflect a high probability of a nine-month extension," investment bank Goldman Sachs wrote in a statement.

 

Some analysts believe OPEC and its allies could extend the agreement but scale down the cuts target from the current 1.8 million barrels per day. That would open the doors to a strong downward correction in the near time.

 

Ahead in the day, attention will be directed to the release of crude and refined products stockpiles from the American Petroleum Institute as of 21:35 GMT.


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