Oil prices fell slightly on Tuesday after some investors took profits on last week’s gains, however, losses were limited on a US-Mexico trade announcement.  Anadarko photo.

Oil prices boosted by modest increase in OPEC+ production

Oil prices slipped on Tuesday on profit taking on last week’s gains, but losses were curbed after an announcement on Monday that the United States and Mexico had made preliminary progress on a trade agreement.

Brent crude futures dipped 26 cents, ending the session at $75.95/barrel, after hitting a session high of $76.97, the highest since July 11.

US West Texas Intermediate crude futures fell 34 cents to $68.53/barrel.  The Canadian Crude Index fell 75 cents to $42.64.

After last week where Brent gained 5.6 per cent and WTI rose by 4.3 per cent, “the market was due for a correction,” Phillip Streible, senior market strategist at RJO Futures told Reuters.

Oil prices were underpinned by news that the US and Mexico had agreed to overhaul NAFTA.

“It paves the way for the energy industry in both countries to coexist rather freely, and that should be good for demand,” Bob Yawger, director of futures at Mizuho in New York, told Reuters.

Canada’s Trade Minister of Foreign Affairs, Chrystia Freeland, will meet with her US and Mexican counterparts on Tuesday.

According to CBC News, Canadian Prime Minister Justin Trudeau said he is “encouraged” by the progress Canada’s NAFTA partners have made on writing a renewed trade deal.

“The team in Washington is digging into the progress made and looking at what the next steps are. We will engage in a positive and constructive way as we always have been and look forward to ultimately signing a deal as long as its good for Canada and good for middle class Canadians,” the prime minister said.

The United States and Mexico both signalled that they would like to see a deal by the end of this week to ensure an agreement can swiftly be sent to Congress for its mandatory 90-day review.

Prices were also supported by data from OPEC showing participants in the OPEC supply cut agreement are boosting their production at a more modest pace than some had expected.

As well, China’s independent refiners are increasing their oil imports after scheduled maintenance wrapped up over the summer and they prepare for increased demand in the winter.

Iran’s crude oil and condensate exports are expected to fall below 70 million barrels this month for the first time since April 2017.  This is well ahead of the November 4 start date to the Trump administration’s economic sanctions against Tehran.

“While the Iranian sanctions remain worthy of a bullish checkmark, we are not expecting any new headlines capable of swinging this factor further into the bullish column,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.

According to the Unite trade union, workers at Total’s North Sea oil platforms have called off their strike action which had been planned for Sept. 3.

US crude stock data from the American Petroleum Institute will be released later on Tuesday, while the US Energy Information Administration will release its oil inventory data on Wednesday morning.