2021.06.2219:05:00UTC+00Oil Futures Settle Lower Ahead Of Inventory Data

Crude oil futures settled lower on Tuesday, weighed down by speculation that the Organization of the Petroleum Exporting Countries (OPEC) and its allies will likely agree to increase crude production.

Profit taking by traders after crude oil prices rose to their highest level since 2018 contributed as well to the weak close of the commodity.

West Texas Intermediate Crude oil futures for July ended down $0.60 or about 0.8% at $73.06 a barrel on the expiration day.

WTI Crude oil futures for August, the new front-month contract, ended down $0.27 or 0.4% at $72.85 a barrel.

Oil prices rose in recent sessions on hopes of economic revival and expected pick-up in summer travel on the back of increasing vaccination coverage.

Meanwhile, expectations for an early return of Iranian crude faded after Ebrahim Raisi, an ultraconservative cleric who's generally hostile toward the West, emerged as the winner of June 18 elections. He's due to take over from Rouhani in mid-August.

BofA Global Research raised its Brent crude price forecasts for this year and next, saying the global oil market will continue to be undersupplied. Goldman Sachs is expecting firmer oil prices moving forward.

On the supply front, OPEC and allies have been gradually increasing production since May as per the decision taken a few months ago. The OPEC+ is now set to meet again on July 1 to take stock of the situation, and it is being speculated that the group will consider hiking production further.

Traders now await weekly oil reports from the American Petroleum Institute (API) and Energy Information Administration (EIA). The API's report is due later today, while the EIA's inventory data is due out Wednesday morning.