Oil futures settled nearly flat Tuesday, as traders remained on the sidelines ahead of a closely watched OPEC meeting.
Light, sweet crude for July delivery settled up 8 cents, or 0.1%, at $99.09 a barrel on the New York Mercantile Exchange. The contract traded in a wide range, reflecting uncertainty over Wednesday's meeting. Nymex crude fell as low as $99.74 in intraday trading before ending higher.
Brent crude, however, rose sharply. On the ICE futures exchange, the July contract settled up $2.30, or 2%, at $116.78 a barrel.
"People want to be in the Brent," said Andy Lipow, president of oil consultancy Lipow Oil Associates in Houston.
Traders looked toward Wednesday's meeting at which members of the Organization of Petroleum Exporting Countries are expected to raise quotas. Saudi oil officials backed by Gulf producers like Kuwait and the United Arab Emirates are pushing for an increase of up to 1.5 million barrels a day amid rising global oil demand and triple-digit prices.
However, other OPEC members have said they see little need to raise quotas. Ali Naimi, the oil minister of Saudi Arabia, the only member country with meaningful spare production capacity, was unusually silent ahead of Wednesday's meeting--a sign that a consensus on output remained far off.
"There seem to have been a lot of mixed signals," said Michael Wittner, oil analyst for Societe Generale in New York. "The Saudis seem to be making it pretty clear they want to increase production, and most of the time they get it their way."
If the producers do raise the production ceiling, it would be the first increase since 2008. Such a move is seen as weakening prices, at least in the short term. In the longer term, it would diminish the amount of spare capacity the producers have left, potentially reducing their leeway for additional production hikes in the future.
Meanwhile, the rally in Brent crude sent its differential to the Nymex light, sweet contract soaring Wednesday. The differential--or "spread"--rose to $17.69 a barrel, up from $15.47 a day ago. Historically, the two contracts have traded in lockstep, but the Brent contract has traded at a steep premium in recent months due to high inventory levels at the Nymex delivery point of Cushing, Okla.
Analysts said no single factor was behind Wednesday's divergence. Escalating unrest in Yemen and Syria has spurred concerns about additional supply disruptions of Brent-benchmarked crude, while traders remain concerned about diminishing production in the North Sea, the source of Brent crude.