Crude futures were down on Tuesday on bets that OPEC will not cut output to stem a supply glut when the world’s biggest oil producers meet this week, although a rally in U.S. gasoline and a weak dollar limited losses on the petroleum complex.
Trading has been sluggish ahead of the Organization of the Petroleum Exporting Countries’ meeting in Vienna on Friday amid worries the group will choose to keep output high to defend market share against non-member oil producers such as the United States and Russia.
U.S. jobs data for November are also due on Friday, and likely to keep oil prices range bound till then, traders said.
Stronger jobs numbers could help the Federal Reserve decide on the first U.S. rate hike in nearly a decade, sending the dollar higher and oil possibly into the $35-a-barrel area.
“Markets are realizing the weakness in the fundamentals and the potential for an absolute non-event (OPEC) on Friday, which has more possibility of putting prices down further,” said Abhishek Deshpande, strategist for Natixis in London.
Brent crude futures LCOc1 were down 40 cents, or 0.8 percent, at $44.21 a barrel by 11:04 a.m. EST (1604 GMT).
U.S. crude’s West Texas Intermediate futures CLc1 was trading down 25 cents, or 0.6 percent, at $41.57.
U.S. gasoline futures, also known as RBOB RBc1, soared about 6 percent to near three-week highs, reacting to what traders said was higher requirements for refiners to meet U.S. renewable fuel standards.
The Environmental Protection Agency (EPA) on Monday raised its previous targets for the amount of biofuels to be mixed into motor fuel for the three years to 2016.
The Renewable Identification Numbers (RINs) requirements influence U.S. gasoline futures as they ultimately factor in production costs.