Oil prices were flat on Tuesday as the market balanced risk sentiment with supply concerns and the prospect of higher demand.
Brent crude futures fell 38 cents, or 0.3%, to $119.13 a barrel at 0926 GMT.
U.S. West Texas Intermediate (WTI) crude futures fell 25 cents, or 0.2%, to 118.25 a barrel, after rising more than $1 a barrel earlier in the session.
“Risk sentiment is responsible for the decline, with negative European equity markets,” said UBS analyst Giovanni Staunovo.
The US State Department’s authorization for Eni and Repsol to start shipping Venezuelan crude to Europe from July to replace lost Russian barrels has also weighed on prices in recent days.
Industry analysts doubt the production policy decision taken last week by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, will reduce tight supply.
The group’s decision to advance oil production to 648,000 barrels per day (bpd) in July and August is unlikely to improve the global oil balance as members struggle to secure a quota increase and the rise is less to the loss of Russian crude oil, analysts said. This is probably recognized by Saudi Arabia itself, said Tamas Varga of PVM Oil.
Saudi Arabia, the top oil exporter, raised the July Official Selling Price (OSP) of its flagship Arab light crude to Asia by US$2.10 from June, a premium of US$6.50 compared to Oman/Dubai quotes.