Crude oil depreciated by about 2 per cent on Thursday over concerns about oversupply in the market ahead of a meeting of the Organisation of the Petroleum Exporting Countries and allies (OPEC+) this weekend.
Brent crude futures depleted by $1.24 or 1.9 per cent to $64.11 per barrel and the US West Texas Intermediate (WTI) crude futures shrank by $1.30 or 2.1 per cent to $60.48 per barrel.
OPEC+ could agree to raise oil production by up to 500,000 barrels per day in November, triple the increase for October, as Saudi Arabia seeks to reclaim market share.
Eight members of OPEC+, which pump half of the world’s output, could agree to raise production in November by 274,000-411,000 barrels per day.
This is the latest expectation after OPEC in a post on X said it rejected media reports for plans to raise output by 500,000 barrels per day, calling them inaccurate and misleading.
The group has raised output in monthly chunks ranging from as little as 137,000 barrels per day to as much as 548,000 barrels per day.
At their peak, OPEC+’s total output reductions amounted to 5.85 million barrels per day, made up of three different elements: voluntary cuts of 2.2 million barrels per day, plus 1.65 million barrels per day by eight members, and another 2.0 million barrels per day by the whole group.
The eight producers plan to fully unwind one element of those cuts: 2.2 million barrels per day by the end of September. For October, they started removing a second layer, of 1.65 million barrels per day, with the increase of 137,000 barrels per day.
Potentially higher OPEC+ supply, slowing global refinery crude runs due to maintenance and a seasonal dip in demand in the months ahead are set to accelerate oil stock builds.
The Energy Information Administration (EIA) said on Wednesday that US crude oil, gasoline and distillate inventories rose last week as refining activity and demand softened.
The Group of Seven nations’ finance ministers said on Wednesday they will take steps to increase pressure on Russia by targeting those who are continuing to boost purchases of Russian oil.
Meanwhile, the US will provide Ukraine with intelligence for long-range missile strikes on Russian energy infrastructure. This will make it easier for Ukraine to hit refineries, pipelines, and other infrastructure with the aim of depriving Russia of revenue and oil.