India Urges OPEC Nations To "Fill Supply Gap", Ensure Sustainable Prices

Oil officials from OPEC and its allies started to arrive in Vienna for this week's meeting, which is expected to be one of the most contentious summits in years, as Iran firmly opposes a Saudi-Russia-led production increase proposal, while a US shale executive urged OPEC to act to prevent oil prices from surging to $100 that will hurt both the cartel and Texas producers as it would dent demand.

Additionally, in a sign of strong demand, USA refineries processed a seasonal record of 17.7 million barrels per day (bpd) of crude oil last week, according to the EIA. Oil prices stabilized on Wednesday, with the Brent crude unchanged at $75 per barrel.

Crude oil is catching some lift in Wednesday trading with WTI creeping into the $65/barrel handle as United States inventories deliver a slight drawdown.

The market is now under "OPEC-Watch" with numerous major players on the sidelines until the cartel along with Russian Federation makes its decision about production rates at its meeting in Vienna on June 22-23.

"There appears to be an air of confidence that this deal will move through", said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore. He said Trump had contributed to the rise in prices by imposing sanctions on Opec members Iran and Venezuela, which will likely lead to lower exports.

India is the biggest oil client of Iran after China.

OPEC source also said that pressure for increased output was also coming from some non-OPEC members, especially Russian Federation, now supporting the position of Saudi Arabia.

Adding to the complications is a lack of compromise among usually aligned Gulf oil producers ahead of the Friday meeting, according to two sources familiar with the talks.

OPEC, together with other key producers including Russian Federation, started withholding output in 2017 to prop up prices, but a tightening market in 2018 led to calls by major consumers for more supplies.

Gasoline stockpiles rose by 3.3 million barrels, while inventories of distillate fuel, jumped by 2.7 million barrels, the EIA reported.

Beyond the short-term, Barclays said there were headwinds for oil prices.

Oil catches some much-needed lift on U.S. crude stocks declines.