Oil prices slid on Thursday, extending a decline of more than 2 per cent in the previous trading session, as investors and traders look ahead to a weekend meeting of OPEC+ where producers are expected to consider another increase in output targets.
Brent crude fell 27 cents, or 0.40 per cent , to $67.33 a barrel by 0114 GMT, while U.S. West Texas Intermediate crude fell 28 cents, or 0.44 per cent , to $63.69 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.
The prospect of OPEC+ raising output has increased ahead of the meeting, said Phil Flynn, a senior analyst with Price Futures Group. Traders had expected no change from the group.
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.
Market participants now await government data on U.S. crude stockpiles, due on Thursday, a day late due to a U.S. holiday on Monday. U.S. crude stocks rose by 622,000 barrels in the week ended on August 29, market sources said, citing American Petroleum Institute (API) figures on Wednesday.
The API estimate for a U.S. build in crude stocks went against analysts polled by Reuters who estimated, on average, that U.S. crude inventories fell by 2 million barrels.
