LONDON: 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 89 cents, or 1.3%, to $66.71 a barrel by 1301 GMT, while U.S. West Texas Intermediate crude shed 85 cents, or 1.3%, to $63.12 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.
Oil prices drop as OPEC+ weighs another output hike
“The sentiment is driven by talks of further possible production increase from OPEC+,” Tamas Varga, an analyst with PVM Oil, said.
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.
“The increase of Venezuelan crude oil shipments to the U.S. also adds to the gloomy mood, but the RBOB strength, based on the drawdown in U.S. stocks reported by the API last night, puts a floor under the market, for now,” Varga added.
Venezuela’s oil exports rose to 900,000 bpd last month, to a nine month high, after energy producer Chevron received a license that has allowed the OPEC country’s crude to return to the U.S. market.
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.
