* Global consumption is solid, but risks are growing: BofAML
* WTI trades below $66 after falling 7.7% in previous two weeks

By Heesu Lee

(Bloomberg) —

Oil held losses below $66 a barrel after an OPEC committee stressed the need to ensure supplies can meet growing demand, adding to speculation the group will phase out its production cuts.

Futures in New York were little changed after a 1.8 percent drop on Friday. OPEC members including Saudi Arabia and its allies emphasized the importance of ensuring stable oil supplies and offsetting output losses from some parts of the world. Meanwhile, the number of rigs targeting crude in the U.S. rose to the highest since March 2015, according to Baker Hughes.

Oil’s near the lowest level in almost two months after Saudi Arabia and Russia signaled plans to restore output for the first time since the end of 2016. Their production cuts have cleared a global inventory surplus and there’s now a growing risk of supply disruptions due to U.S. President Donald Trump’s decision to renew sanctions on Iran and Venezuela’s economic crisis. Rising fuel prices around the world have sparked protests from Brazil to Siberia, adding to concerns that demand could begin to falter.

“OPEC and Russia have shown concerns about the impact of the rapid escalation in oil prices on global demand,” Bank of America Corp. analysts said in a note. While governments may intervene to cap fuel prices in emerging markets, “we note the growing risks to consumption arising from higher U.S. interest rates and political turmoil in Europe.”

Wext Texas Intermediate for July delivery traded at $65.69 a barrel on the New York Mercantile Exchange, down 12 cents, at 10:06 a.m. London time. The contract dropped 3.1 percent to $65.81 last week. Total volume traded was about 18 percent below the 100-day average.

Brent futures for August settlement lost 29 cents to $76.50 a barrel on the London-based ICE Futures Europe exchange. Front-month prices rose 0.5 percent to $76.79 last week. The global benchmark traded at a $10.85 premiumto WTI for August.

Futures were 1.1 percent lower at 469.6 yuan per barrel on the Shanghai International Energy Exchange in afternoon trading, after dropping 0.6 percent last week.

Investors are searching for signs of whether other members of the Organization of Petroleum Exporting Countries will support the proposal to boost output at their June 22 meeting. Ministers from Saudi Arabia, the United Arab Emirates, Kuwait, Algeria and Oman met on Saturday in Kuwait City, the Kuwait News Agency reported, citing a statement from the joint ministerial monitoring committee of OPEC and non-OPEC countries.

Meet Demand

The ministers “emphasized the need for healthy market conditions that stimulate adequate investments in the energy sector, in order to ensure stable oil supplies are made available in a timely manner to meet growing demand and offset declines in some parts of the world,” according to the statement issued Sunday.

While Saudi Arabian Oil Minister Khalid Al-Falih said scaling back supply caps put in place since early 2017 is “on the table,” most producers weren’t consulted about the proposal to revive supplies.

Other oil-market news:

* In the U.S., working rigs rose by two last week to 861, expanding on an almost-uninterrupted streak since late October. This came after an Energy Information Administration report showed nationwide productionjumped to another record high above 10 million barrels a day in the week ended May 25.
* Hedge funds reduced their net-long positions in West Texas Intermediate crude while shorts jumped to the highest level since November, according to the U.S. Commodity Futures Trading Commission.
* Analysts from Sanford C. Bernstein & Co. boosted their Brent oil futures forecast to $73 a barrel in 2018 and $76 in 2019, compared to a previous outlook of $56 and $60, respectively, as global inventories are expected to continue falling.

–With assistance from Tsuyoshi Inajima.

To contact the reporter on this story:
Heesu Lee in Seoul at hlee425@bloomberg.net

To contact the editors responsible for this story:
James Herron at jherron9@bloomberg.net
Amanda Jordan