Oil slips on concerns that OPEC+ may be set to pump up supply

By Sonali Paul
MELBOURNE, March 3 (Reuters) - Oil prices were down in early
trade on Wednesday, extending several days of losses, amid
uncertainty over how much supply producing countries will push
to restore to the market at a meeting this week while the
coronavirus pandemic persists.
U.S. West Texas Intermediate (WTI) crude CLc1 futures fell
18 cents, or 0.3%, to $59.57 a barrel by 0122 GMT, down 6% since
Feb. 25, when they hit their highest close since May 2019.
Brent crude LCOc1 futures dipped 7 cents, or 0.1%, to
$62.63 a barrel, down 7% from a 13-month high hit last week.
The Organization of the Petroleum Exporting Countries (OPEC)
and allies, together called OPEC+, are set to meet on Thursday,
at a time when they are generally positive on the oil market
outlook compared with a year ago when they slashed supply to
boost prices.
OPEC+ sources last week said an output increase of 500,000
barrels per day (bpd) looked possible without building
inventories. Saudi Arabia's voluntary cut of 1 million bpd is
due to end in April, but it is unclear whether it will restore
all of that supply right away. "The days of GDP and oil demand figures being in the red
because of the pandemic-induced shock appear to be behind us,"
OPEC Secretary General Mohammad Barkindo said on Tuesday,
speaking ahead of a meeting of OPEC+'s Joint Technical Committee
(JTC). However, a JTC document seen by Reuters cited continued
uncertainties in physical markets and risks of the coronavirus
pandemic persisting with COVID-19 mutations.
"The question the group must answer this week is whether the
rebound in demand is strong enough to sustain an increase in
output," ANZ analysts said in a note.
Reinforcing concerns of potential oversupply, the American
Petroleum Institute industry group reported U.S. crude stocks
rose by 7.4 million barrels in the week to Feb. 26, in stark
contrast to analysts' estimates for a draw of 928,000 barrels.
API/S
"The unexpectedly large crude inventories build hit at a
worrying time for oil bulls," said Stephen Innes, global market
strategist at Axi.