Oil moves higher, hovers below $40 as doubts emerge over next step on OPEC cuts - Reuters

Oil moves higher, hovers below $40 as doubts emerge over next step on OPEC cuts - Reuters:

Oil ended slightly higher on Wednesday but remained below the session’s early highs above $40 a barrel, the highest since March, retreating as doubts emerged about the timing and scale of a potential extension to the pact between OPEC and its allies to cut crude supplies. 

Oil prices were supported by a drawdown in U.S. crude inventories in the latest week, but came under pressure as U.S. refined product inventories surged on tepid demand.

“As product demand remains subdued, gasoline inventories showed a solid build, while distillates showed a mammoth one - despite refinery runs being over 3.6 million barrels per day below year-ago levels,” said Matt Smith, director of commodity research at ClipperData.

Saudi Arabia and Russia have a deal to extend oil output cuts by a month, but a policy meeting on Thursday rather than later in June is unlikely, sources said. Early in the session, oil fell when Bloomberg reported the Thursday meeting was in doubt.

Brent crude futures for August settled up 22 cents, or 0.6%, at $39.79 a barrel. The session high of $40.53 was the highest since March 6. West Texas Intermediate (WTI) crude for July rose 48 cents, to $37.29 a barrel.