Oil Still Awaits OPEC+ Decision
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World oil prices fell again in trading this morning (September 5), extending their decline to three consecutive days. Market concerns about a possible increase in production by OPEC+ were the primary driver of selling pressure, despite limited support from geopolitical and strategic demand perspectives.
West Texas Intermediate (WTI) crude oil futures fell to around US$63.29 per barrel, while Brent traded at around US$66.77 per barrel. Both benchmarks have fallen by around 5% in the past week.
The drop in oil prices occurred after news emerged that OPEC+ plans to increase supply starting next October. According to a Reuters report, the oil producer group is likely to agree to a production increase of 1.65 million barrels per day (bpd), or around 1.6% of total global demand. This move is seen as a response to prices that had previously surged above US$70 per barrel.
Meanwhile, the weekly report from the US Energy Information Administration (EIA) showed an increase in US crude oil stocks of 2.4 million barrels, contrary to market expectations of a decrease of 2 million barrels. This increase in stocks further puts pressure on prices, as it indicates weakening demand in the domestic market.
However, several factors remain supportive of oil prices. Among them is strategic hoarding by China, which is known to have continued to purchase large amounts of oil throughout this year—an average of 530,000 barrels per day. Geopolitical tensions involving Russia and the possibility of new sanctions also add an element of uncertainty to global supply. (mrv)
Source: Newsmaker.id
