LONDON, (Reuters) – Oil steadied under $134 a barrel on Wednesday after falling for three days, as the market awaited data that is expected to show falling U.S. crude stocks ahead of an emergency meeting in Saudi Arabia aimed at taming prices.
Saudi Arabia has called the meeting between oil producing and consumer nations on June 22 to address soaring prices, and expectations the world’s top exporter will boost output has pulled prices back from record highs near $140.
U.S. crude futures for July CLc1 fell 20 cents to $133.81 a barrel by 0900 GMT, after falling nearly $3 in the past three sessions. The contract briefly hit a record of nearly $140 on Monday. London Brent crude LCOc1 was 19 cents down at $133.53.
Oil traders initially gave a muted response to news that Saudi Arabia was poised to pump oil at its fastest rate in decades next month, but analysts said increasing evidence of more crude is gradually shifting sentiment.
“I’m surprised prices didn’t fall further … if the Saudis discount their oil significantly, I think U.S. refiners will really start to buy and start building inventories,” said Robert Nunan, a risk manager at Mitsubishi Corp in Tokyo.
U.S. crude oil stock data due later in the day is expected to post a fall of 1.5 million barrels last week, a fifth consecutive draw, a Reuters survey showed.
Analysts are expecting a rise of 800,000 barrels for gasoline and 1.8 million barrels for distillates.
While many analysts questioned whether the Saudis would find willing buyers for its oil at current prices, India’s Reliance Industries said on Tuesday it was already committed to buy 30 percent of the additional Saudi crude in July, after lifting the same proportion of extra supplies this month.
The relentless rise in oil, which has pushed prices nearly 40 percent higher since January this year, has led to protests across the world and has alarmed governments worried about its impact on their economies.
Oil prices are up nearly sevenfold since 2002 on strong demand from emerging economies such as China. A surge in speculative buying by investors hedging against inflation and the weak dollar has accelerated the rally this year.
While Saudi moves to dampen markets by pumping more oil, U.S. and British regulators unveiled a plan to slap position limits on U.S. crude contracts on the London-based ICE exchange to rein in speculators.
The combined effort among Saudi Arabia, the United States and Britain could rattle some investors and bring down prices, analysts said.