Oil prices fall as market awaits G20, OPEC

TOKYO, June 27 (Reuters) - Oil fell on Thursday, erasing
some of the previous session's strong gains, as traders eye the
G20 summit in Japan and a meeting of OPEC and other oil
producers to decide on an extension of output cuts.
Brent crude LCOc1 futures were down 44 cents, or 0.7%, at
$66.05 by 0059 GMT.
U.S. West Texas Intermediate (WTI) crude CLc1 futures were
down 41 cents, or 0.7%, at $58.97.
Oil prices rose more than 2% on Wednesday and hit their
highest in about a month, buoyed by U.S. government data showing
a larger-than-expected drawdown in crude stocks as exports hit a
record high and surprise drops in refined product stockpiles.
However, traders said concerns that a hoped-for breakthrough
on trade at the G20 may not eventuate and some nervousness about
continued output cuts were crimping follow-through buying.
"I think the length of the speculative positioning might be
stretched too tight ahead of G20 and of course OPEC," said
Stephen Innes, managing partner at Vanguard Markets in Bangkok,
said.
U.S. President Donald Trump will meet with Chinese President
Xi Jinping at the Group of 20 summit that starts on Friday in
Osaka, Japan to seek a breakthrough in negotiations to end a
trade war that has been hitting global economic growth.
Trump said on Wednesday that a deal was possible but also
spoke of a Plan B that would involve reducing business ties with
China. "With Trump stirring up trade war dust via "Plan B" there is
still that element of the unknown," Innes said.
Almost immediately after the G20 summit ends on Saturday,
the Organization of the Petroleum Exporting Countries (OPEC)
meets on Monday to discuss an extension of production cuts to
support prices.
The day after that OPEC members meet with other producers
including Russia in a grouping known as OPEC+, which agreed in
December to reduce supply by 1.2 million barrels per day from
Jan. 1. The agreement is due to expire on June 30.
Crude inventories USOILC=ECI in the United States, the
largest producer and consumer of oil, fell 12.8 million barrels
last week, the Energy Information Administration said, far
surpassing analyst expectations for a decrease of 2.5 million
barrels.
That was the most since September 2016, according to the
statistical arm of the Department of Energy.
Net U.S. crude imports fell last week by 1.2 million barrels
per day (bpd). Overall crude exports rose to 3.8 million bpd,
beating the previous record of 3.6 million bpd in February.