Oil Prices Fall Ahead of Quota Debate

July light sweet crude oil was ticking down 25 cents to $98.76 a barrel and July Brent crude was flat at $114.48.

"With the Organization of the Petroleum Exporting Countries meeting around the corner and a much higher call on OPEC crude foreseen for the third quarter (30.5 million b/d), a sizeable production increase would appear to be on the cards, although international politics is always good for a surprise," the JBC Energy Research Center said in a morning note.

Low Gas Prices May Not Benefit Obama

All Eyes on Europe, Jobs Report in Coming Week

First Niagara: Financial Winner

Following a spate of poor U.S. economic data last week and subsequent concerns about the stagnation of the global recovery, there is mounting pressure on the oil cartel to raise production quotas at its regular meeting on June 8 in Vienna, Austria. On Monday, the International Energy Agency's executive director, Nobuo Tanaka, joined the voices urging OPEC to hike output.

Oil ministers have been divided on the question of whether to raise production quotas this Wednesday.

"A deal to do more than close the gap between the official output target and actual production -- about 1.4 million barrels per day -- could prove difficult due to opposition from price hawks such as Iran and Venezuela," say analysts from brokerage firm Phillip Futures.

Talks are likely to be heated, in no small part because of their opposing stances on Libya's violent political quandary. OPEC members Qatar, Kuwait and the United Arab Emirates are backing rebel forces in their fight to overthrow Libyan leader Moammar Gadhafi.

On Wednesday, the U.S. Department of Energy comes out with its weekly petroleum inventory report for the week ended June 3. A Reuters poll of analyst suggests a decrease in crude oil stocks by 600,000 barrels, potentially providing a bit of support.

Oil services companies were trading higher. Halliburton (HAL) was up 1.1% to $48.59 Tuesday morning, Schlumberger (SLB) was higher by 1.3% at $84.14, Baker Hughes (BHI) was rising by 1.9% to $73.59, Newpark Resources (NR) was adding 2.2% to $8.93, Tesco (TESO) was up 0.7% at $19.19, and Flotek Industries (FTK) was higher by 2% to $8.20.