LONDON: Oil prices fell by about 2% on Wednesday ahead of a weekend meeting of OPEC+ producers that is expected to consider another increase in production targets in October.
Brent crude fell $1.09, or 1.6%, to $68.05 a barrel by 1310 GMT. U.S. West Texas Intermediate crude fell $1.16, or 1.77%, to $64.43 a barrel, having fallen 2% earlier.
Eight members of the Organization of the Petroleum Exporting Countries and allies - known as OPEC+ - will consider further raising oil production at a meeting on Sunday, two sources familiar with the discussions told Reuters, as the group seeks to regain market share.
Another boost would mean that OPEC+, which pumps about half of the world’s oil, would be starting to unwind a second layer of output cuts of about 1.65 million barrels per day, or 1.6% of world demand, more than a year ahead of schedule.
Oil rises as Ukraine war stokes supply worries, market eyes prospects of Fed easing
The group had already agreed to raise output targets by about 2.2 million bpd from April to September, in addition to a 300,000 bpd quota increase for the United Arab Emirates.
“If output is raised in line with new quotas, we see the market moving into a sizeable surplus from September 2025 through 2026, with inventories building unless countered by renewed restraint,” said Ole Hvalbye, an analyst at SEB bank.
“Futures for 2026 trade between $65-$66 a barrel, implying market confidence that OPEC+ will eventually reimpose cuts. We share this view, though we see downside risks first as production rises and prices soften into year-end.”
Actual increases from the group, however, have fallen short of its pledges as some members compensated for previous over-production and others struggled to raise output due to capacity constraints.
The oil benchmarks settled up more than 1% in the previous session after the U.S. imposed new sanctions on a network of shipping companies and vessels led by an Iraqi-Kittitian businessman for smuggling Iranian oil disguised as Iraqi oil.
Meanwhile, U.S. crude oil stockpiles were expected to have fallen last week, along with distillate and gasoline inventories, a preliminary Reuters poll of three analysts showed on Tuesday.
But soft economic data kept prices capped. U.S. manufacturing contracted for a sixth month as President Donald Trump’s tariffs hit business confidence and economic activity, weighing on the demand outlook for oil.
Comments
Comments are closed for this article.