June 6 (UPI) -- U.S. crude oil exports, refining activity and the fallout for the geopolitical row over Qatar left a slight bruise on oil prices in early Tuesday trading.
Crude oil prices declined in the previous session after rifts emerged among key members of the Organization of Petroleum Exporting Countries. Saudi Arabia on Monday led a coalition of Middle East nations in severing ties with Qatar over alleged support for terrorist groups. Though a major gas exporter, the row undermines unity among OPEC members and remains centered in a major choke-point for crude oil deliveries to the international market.
A May decision by OPEC to extend, rather than amplify, a production agreement aimed at balancing the market sent crude oil prices lower in recent sessions. With that move in the rear-view mirror, the market focus has shifted to supply and demand metrics in the United States, the world's leading economy.
A survey of analysts from S&P Global Platts revealed expectations of a 3.5 million barrel draw on crude oil inventories for the week ending June 2, which would be about a half-million barrels below the four-year average. The drawdown, however, has been steady for the latter part of the first quarter, though figures could be masked by exports to Asia, where the value of U.S. crude oil crude relative to others makes it competitive.
On consumer fuels, Platts said the refineries are producing refined products to the point that the market is struggling to absorb the surplus.
"After eight straight weeks of drawdowns in U.S. crude oil inventories, oil futures have failed to rally, making it possible that two of the main drivers behind these draws -- exports and refinery activity -- could be construed as bearish influences," Platts Oil Futures Editor Geoffrey Craig said in an emailed newsletter.
The price for Brent crude oil was down about 0.6 percent a half hour before the start of trading in New York to $49.19 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.46 percent to $47.18 per barrel.
Dubai crude, a grade moving in the Asian market, held a premium over WTI of about 70 cents per barrel in early trading.
The American Petroleum Institute publishes supply and demand data late in the day Tuesday and has shown draws considerably larger than forecasts by Platts. Official data from the U.S. Energy Information Administration are released midway through the trading day Wednesday and tend to be higher, but closer to the estimate from Platts.
Kuwait's oil minister offered some market assurances early Tuesday, telling the official Kuwaiti News Agency, known as KUNA, that Qatar was holding up its end of the OPEC-led agreement to trim production despite the geopolitical row.
According to the minister, Qatar is cutting about 30,000 barrels per day from its output in an effort to help balance the market.