Oil dipped after another choppy trading session as investors weighed the prospect that OPEC+ may fast-track output hikes even as US crude stockpiles swell.
West Texas Intermediate fell by almost 1% to settle near $62 a barrel, marking its third straight daily decline. Traders speculated that OPEC+ will consider raising output more than originally anticipated when the group meets this weekend. Still, the alliance has said it has no such plans.
“Any added barrels to global supply will be taken as a major negative by traders,” said Dennis Kissler, a trader at BOK Financial.
Adding to oversupply concerns, US oil reserves rose by 1.79 million barrels last week, while inventories of gasoline and distillates also expanded, the Energy Information Administration reported. US gasoline consumption pulled back to a six-month low, leading futures to decline and raising concerns of near-term demand deterioration.
Traders also were tracking the US federal government shutdown as well as a drop in equity futures.
Although crude stockpiling by China — the world’s largest oil importer — has lent some support to prices in recent quarters, the International Energy Agency has predicted there’ll be a record surplus next year.
“Our near-term balances now appear even more bearish than what we had previously characterized as ‘cartoonishly’ oversupplied,” Macquarie analysts including Marcus Garvey wrote in a note. “Even though nominal supply increases have fallen short of announced levels, the shift in sentiment adds to bearish expectations,” they said of OPEC+ increases.
Gauges of benchmark Middle Eastern crude, meanwhile, came under pressure on Wednesday as the prospect of higher supplies from the region grows — prices in the region also slipped earlier in the week. That added to the bearish sentiment for futures contracts.
Oil Prices
WTI for November delivery dropped 1% to $61.78 a barrel in New York.
Brent for December settlement fell 1% to $65.35 a barrel.
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