SINGAPORE: Global oil prices lost further ground on Thursday, extending the previous session’s fall of more than 2 percent, as traders braced for an OPEC+ meeting this weekend where another increase in production targets is reportedly on the cards.
Brent crude slipped 27 cents, or 0.40 percent, to $67.33 a barrel by 0114 GMT. US West Texas Intermediate crude followed the same trend, down 28 cents, or 0.44 percent, to $63.69 a barrel.
Eyes on OPEC+ decision
The slide in prices comes as eight members of the Organisation of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, prepare to sit down on Sunday. Two sources familiar with the matter told Reuters that the group is weighing the option of lifting output again in October.
Phil Flynn, senior analyst at Price Futures Group, said many traders had been expecting OPEC+ to hold steady, so the possibility of another hike has caught some off guard. “The prospect of OPEC+ raising output has grown in the days leading up to the meeting,” he explained.
The group has already committed to raising production by about 2.2 million barrels per day between April and September, along with an additional 300,000 barrels per day quota increase granted to the United Arab Emirates.
Despite the steady ramp-up, Middle Eastern oil prices have remained the most resilient in the world. According to a report from Haitong Securities, this strength has encouraged Saudi Arabia and other producers to consider pumping even more.
US inventories add to market jitters
Adding to the market’s uncertainty, traders are now awaiting fresh government data on US crude stockpiles, due Thursday. The release was delayed by a day because of Monday’s US holiday.
Figures from the American Petroleum Institute showed an unexpected build of 622,000 barrels in the week ending August 29. This ran counter to analysts polled by Reuters, who had forecast a draw of around 2 million barrels.
With OPEC+ debating how much more oil to put on the market and US inventories showing surprise builds, traders say the coming days could set the tone for global prices heading into autumn.