Oil prices remained relatively stable in early trading on Thursday following a sharp drop the previous night. Traders are balancing concerns over sluggish demand with the potential for a delay in new oil supplies scheduled for next month.
As of 0002 GMT, November Brent crude futures inched up by 9 cents, or 0.12%, to $72.79, recovering from a 1.42% decline during Wednesday’s session. Meanwhile, U.S. West Texas Intermediate (WTI) crude for October saw a 12-cent increase, or 0.17%, to $69.32 after sliding 1.62% the day before. Both benchmarks closed $1 lower at the end of Wednesday’s trading.
OPEC+ is reportedly considering postponing its planned output hike, which was set to begin in October. This discussion comes after a steep drop in oil prices earlier in the month, reaching a nine-month low on September 3, according to sources within the producer group who spoke to Reuters.
Last week, the Organization of the Petroleum Exporting Countries and its allies, including Russia (OPEC+), had planned to move forward with an increase of 180,000 barrels per day (bpd) in October. This was part of their broader effort to gradually roll back the 2.2 million bpd production cuts that had been implemented earlier.
However, factors such as the resolution of a dispute that had halted Libyan exports and reduced demand from China have pushed OPEC+ to reconsider its strategy.
“The OPEC+ report provided some early relief to the market,” analysts from ANZ commented in a note. Nevertheless, ongoing concerns about weak demand, particularly due to China’s slowing factory activity, continued to weigh on the market, the analysts added.
Data from the Chinese government, released over the weekend, showed that the country’s manufacturing sector contracted for the fourth consecutive month in August, reaching its lowest level in six months. This decline, paired with reduced factory prices and a lack of orders, has had a significant impact on the global oil market. China remains the world’s largest importer of crude oil.
In the U.S., crude oil and fuel inventories dropped last week, according to sources familiar with data from the American Petroleum Institute (API). These sources, who requested anonymity, reported that crude stocks fell by 7.431 million barrels during the week ending August 30, surpassing analysts’ expectations of a one-million-barrel decrease in a Reuters poll.
Traders are now awaiting the official U.S. stockpile data from the Energy Information Administration (EIA), which is expected to be released on Thursday at 11:00 a.m. EDT (1430 GMT).
