By Amanda Cooper
Brent crude futures lost $1.19 to trade at $74.10 a barrel by 1421 GMT, having fallen earlier in the day to $73.81, the lowest since May 8. U.S. West Texas Intermediate crude fell 8 cents to $64.67 a barrel.
The U.S. government has asked Saudi Arabia and some other OPEC producers to increase oil production by about 1 million barrels per day (bpd), Bloomberg reported on Tuesday, citing people familiar with the matter.
The request comes after U.S. retail gasoline prices surged to their highest in more than three years and President Donald Trump publicly complained about OPEC policy and rising oil prices.
It also follows Washington's decision to reimpose sanctions on Iran's crude exports that had previously displaced about 1 million bpd from global markets, the report said.
"With the mid-term elections coming up, obviously he wants lower gasoline prices, but at the same time, he's alienating himself from the rest of the world ... so is anybody, apart from Saudi Arabia, maybe going to listen, or comply or cooperate?" PVM Oil Associates strategist Tamas Varga said.
"This seems to be an intervention in OPEC's supply policy ...(the U.S.) walks away from the Iran (nuclear) deal, which pushes up oil prices and less than a month later, demands producers raise production ... this story is Trump-esque."
The Organization of the Petroleum Exporting Countries meets in Vienna on June 22 to decide whether the group and non-OPEC producers, including Russia, should raise output to make up for any supply shortfall from Iran and Venezuela.
Saudi Arabia and Russia were already discussing raising OPEC and non-OPEC oil output by around 1 million bpd, sources familiar with the matter said on May 25.
Global oil supply has tightened with the OPEC-led production cuts that began in early 2017.
"(The output decision) is going to be the main event of the month and the main input for the second half of the year, so any change in OPEC policy is a big event," Petromatrix strategist Olivier Jakob said.
Fund managers this year racked up a record bet on a continued rise in oil prices, but the sustained increase in U.S. shale production and now the prospect of higher OPEC supply have prompted many investors to pare those positions.
(Additional reporting by Chung in SEOUL and Roslan Khasawneh in SINGAPORE; Editing by Dale Hudson and Edmund Blair)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)