Oil prices were mixed on Thursday, with Brent slipping and USA crude gaining, as a stronger dollar weighed and a key supply-setting meeting of the Organization of the Petroleum Exporting Countries loomed.
Their combined strength should also give them a say over matters such as oil exports from Iran after the USA pullout from the Iran nuclear deal.
Brent and WTI hit 3-1/2-year highs in May but have since drifted lower, indicating investors expect the market to soon become better supplied as USA crude production rises and as OPEC and its allies look poised to increase output. The IEA said OPEC countries in the Middle East could quickly boost production by 1.1 million bpd.
As a follow-up of oil minister Dharmendra Pradhan's idea floated at the International Energy Forum (IEF) meeting here in April, Indian Oil chairman Sanjiv Singh travelled to Beijing this month to meet Wang Yilin, chairman of China National Petroleum Corp (CNPC), a top source said.
The Organization of Petroleum Exporting Countries will meet next week and discuss whether to restore production it halted previous year.
The group is due to meet on June 22 in Vienna, Austria, to discuss future production policy.
U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $65.99 a barrel, down 37 cents, or 0.6 percent, from their last settlement.
Top exporter Saudi Arabia - which has so far led OPEC's efforts to withhold supplies - is also showing signs of raising production. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! Saudi Arabia, Iran's rival and the largest producer in OPEC, and Russian Federation, the world's largest producer and a party to the deal, have already increased supply.
The potential for OPEC to boost production has raised concerns about the cartel's limited spare capacity, which could fall to as low as 2 million bpd. Prices have risen around 60 percent over the previous year. President Vladimir Putin will host Saudi Crown Prince Mohammed Bin Salman, while energy ministers Alexander Novak and Khalid Al-Falih will also meet.
Oil prices steadied on Thursday, but were likely to remain under pressure from evidence of rising USA output and uncertainty over the outlook for supply before a key meeting next week of the world's largest exporters.
Various sources show that "considerable uncertainty as to world oil demand and non-OPEC supply prevails", OPEC said, leading to a wide range of estimates for the remainder of 2018.
Fund manager Pierre Andurand at Andurand Capital was bullish.
"At OPEC's meeting in a good week's time, Saudi Arabia apparently plans to make several proposals that all boil down to increasing production on a one-off or gradual basis by between 500,000 and 1 million barrels per day", Commerzbank analysts said in a note.
Moscow believes the new arrangement it proposes would provide stability for the oil market through a period of high demand during the northern hemisphere summer, the person said.