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Summary
- OPEC+ to consider raising oil production further, sources say
- OPEC+ meeting set for Sunday
- US crude stocks rose last week, sources say
(Reuters) – Oil prices fell 1.5% on Thursday, adding to their more than 2% decline the previous session, as investors awaited a weekend meeting of OPEC+ at which producers are expected to consider another increase in output targets.
Brent crude fell $1, or 1.5%, to $66.59 a barrel by 1104 GMT, while U.S. West Texas Intermediate crude shed $1, or 1.6%, to $62.95 a barrel.
Eight members of the Organization of the Petroleum Exporting Countries and allies – known together as OPEC+ – will consider further increases to production in October at a meeting on Sunday, two sources familiar with the discussions told Reuters, as the group seeks to regain market share.
A potential OPEC+ production hike would send a strong signal that regaining their market share takes priority over price support, said PVM analyst Tamas Varga.
OPEC+ had already agreed to raise output targets by about 2.2 million barrels per day from April to September, in addition to a 300,000 bpd quota increase for the United Arab Emirates.
Over the past few months, despite the accelerating production increases, Middle Eastern oil prices have remained the strongest regional prices globally. This has bolstered the confidence of Saudi Arabia and other OPEC members to boost output, according to a Haitong Securities’ report.
Weighing further on prices were some shaky U.S. macroeconomic data that showed job openings fell to a 10-month low in July, consistent with easing labour market conditions and supporting expectations the Federal Reserve would cut interest rates this month.
Markets are also awaiting government data on U.S. crude stockpiles due on Thursday, a day later than usual because of a U.S. holiday on Monday, to gauge the strength of demand in the world’s biggest oil consumer.
U.S. crude stocks rose by 622,000 barrels in the week ended August 29, market sources said, citing American Petroleum Institute figures on Wednesday.
Reporting by Sam Li in Beijing and Trixie Yap in Singapore; Additional reporting by Nicole Jao in New York; Editing by Christian Schmollinger, Muralikumar Anantharaman and Hugh Lawson
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