Oil prices edge up amid potential OPEC+ output delay, US inventory drop
Shafaq News/ Oil prices edged upafter plunging to multi-month lows previously as major producers may delay anoutput increase planned for next month and US inventories fell, though thegains were limited by persistent demand concerns.
Brent crude futures for Novemberrose 15 cents, or 0.1%, to $72.85 at 0402 GMT after dropping 1.4% in theprevious session to their lowest close since June 27, 2023. US West TexasIntermediate crude futures for October were up 15 cents, or 0.22%, to $69.35after dropping 1.6% on Wednesday to the lowest settlement since Dec. 11.
"Pessimistic sentiments in oilmarkets seem to ease after robust API data and news of OPEC+ reconsideringoutput jump, surfaced and boosted hopes," said Priyanka Sachdeva, seniormarket analyst at Phillip Nova.
The Organization of the PetroleumExporting Countries and allies led by Russia, known as OPEC+, is discussingdelaying its oil output increase scheduled to start in October after priceshave tanked, four sources from the producer group told Reuters on Wednesday.
Last week, OPEC+ was set to proceedwith its 180,000 barrels-per-day (bpd) output hike in October, part of a planto gradually unwind its most recent cuts of 2.2 million bpd.
But the potential end to a disputehalting Libyan exports and soft Chinese demand has pushed the group toreconsider.
Prices on Thursday also foundsupport after American Petroleum Institute (API) data showed US crude oil andfuel inventories fell last week, according to market sources citing the APIfigures on Wednesday.
"API numbers released overnightwere constructive," said ING analysts in a client note, adding that ifofficial government data shows the same decline later it could be "thelargest weekly drop since June."
The API figures showed crude stocksfell by 7.431 million barrels in the week ended Aug. 30, compared withanalysts' expectation in a Reuters poll of a 1 million barrel draw.
Weekly US oil stocks data from theEnergy Information Administration (EIA) is due on Thursday at 1430 GMT. [EIA/S]
Still, the persistent demand worriescapped price gains.
Data published over the weekend bythe Chinese government revealed that manufacturing activity in the world's topoil consumer sank to a six-month low last month as factory gate prices tumbledand owners struggled for orders.
"Economically, the slowdown inthe Chinese economy and weak oil demand there, which has surprised some in themarket, have damaged market confidence," Citi analysts said in a note.
"Fundamentally, a relativelylooser market awaits. Refineries entering into turnaround season would reduceofftake, the end of Middle East summer burn should mean more oil produced wouldbe freed up for exports, and weak refining margins would threaten more refineryrun cuts that reduce oil offtake."
(Reuters)
