Brent trades below $75 as Iran signals support for small OPEC supply increase

Oil prices dipped on Thursday as Iran signalled it could be won over to a small rise in OPEC crude output, likely paving the road for the producer cartel to agree a supply increase during a meeting on June 22.

However, prices were prevented from falling further by record refinery runs in the United States and a large decline in U.S. crude inventories, a sign of strong fuel demand in the world`s biggest economy.

Brent crude futures , the international benchmark for oil prices, were at $74.55 per barrel at 0040 GMT, down 19 cents, or 0.3 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $65.63 a barrel, down 8 cents.

Iran, a major supplier within the producer cartel of the Organization of the Petroleum Exporting Countries (OPEC), signalled on Wednesday it could agree on a small increase in the group`s output during a meeting at OPEC`s headquarters in Vienna on June 22.

"There appears to be an air of confidence that this deal will move through," said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore.

Tehran had previously resisted pressure by OPEC`s de-facto leader Saudi Arabia to raise output.

OPEC, together with other key producers including Russia, started withholding output in 2017 to prop up prices, but a tightening market in 2018 led to calls by major consumers for more supplies.

In a sign of strong demand, U.S. refineries processed a seasonal record of 17.7 million barrels per day (bpd) of crude oil last week, according to data from the Energy Information Administration (EIA) said on Wednesday.

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Amid strong consumption, commercial U.S. crude inventories dropped by 5.9 million barrels in the week to June 15, to 426.53 million barrels , the EIA said.

U.S. crude oil production was flat week-on-week, remaining at a record 10.9 million bpd.