LONDON, May 29 (Reuters): Oil edged lower on Tuesday, pressured by expectations that Saudi Arabia and Russia could pump more crude to compensate for a potential supply shortfall.
Brent crude futures LCOc1 were down 6 cents at $75.24 a barrel by 0848 GMT. The price has fallen by nearly 7 per cent since hitting a 2014 high above $80 on May 22.
US West Texas Intermediate (WTI) crude CLc1 fell $1.39 to $66.49 a barrel.
"Investors have started pricing in the likelihood of Saudi Arabia and Russia increasing crude oil production," ANZ Bank said in a note.
"However, doubt remains, with any agreement to be finalised at the June OPEC meeting."
Concerns that Saudi Arabia and Russia could boost output have exerted downward pressures on oil prices, along with rising oil production in the United States.
Saudi Arabia and Russia have discussed raising OPEC and non-OPEC oil production by 1 million barrels per day (bpd) to counter potential supply shortfalls from Venezuela and Iran.
"The oil market has moved from ample to tight supply in recent months due to strong demand, Venezuela's supply collapse and the petro-nations' production restrictions. Where the balance is heading going forward largely depends on political factors," Julius Baer's Norbert Ruecker said in a note.
"High uncertainty clouds the short-term outlook and we maintain a neutral view. In the medium to longer term, we still see oil prices falling as indicated by the downward-sloping futures curve. Our 'low for longer' view is deferred, not refuted."
The Organisation of the Petroleum Exporting Countries (OPEC) is due to meet in Vienna on June 22.
Volatility, a way of measuring demand for a derivative, on highly bearish Brent crude sell options that expire just after the meeting has shot to its highest since February.
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