Oil Falls, OPEC+ Considers Increasing Production
Oil prices weakened sharply after a Reuters report indicated that OPEC+ would discuss the possibility of a new production increase at its meeting later this week. West Texas Intermediate (WTI) fell as much as 2.6% to $64.07 per barrel, while Brent for November delivery fell 2.1% to $67.71 per barrel. This decline was also triggered by weaker-than-expected US economic data, which dampened the long-term outlook for consumption.
Previously, the market expected OPEC+ to withhold production in October after a series of increases. However, this new move to increase supply could widen the oil surplus in the fourth quarter of this year, especially when supply from outside OPEC is expected to surge. OPEC+'s strategy to regain market share has made traders increasingly wary of the cartel's policy direction.
According to analysts, this OPEC+ decision is risky. If it does increase production amid weaker seasonal demand, the market could become oversupplied more quickly. However, some market participants still believe OPEC+ will exercise restraint, considering that excessive supply increases could actually harm global oil prices.
This uncertainty also arises amid geopolitical tensions. US President Donald Trump is attempting to pressure India to reduce Russian oil imports, while also sending warships to Venezuela on counter-narcotics operations. This situation adds to the complexity of the oil market, which now has to carefully weigh a combination of fundamental factors and global politics. (ayu)
Source: Newsmaker.id
