Oil prices declined in early Asian trading on Thursday, extending losses from the previous session as reports suggested OPEC+ may consider another output increase at its upcoming meeting.
Markets were also weighed down by industry data indicating a weekly rise in U.S. oil inventories, raising concerns about a post-summer slowdown in American fuel demand. Brent crude for November delivery fell 0.4% to $67.35 a barrel, while West Texas Intermediate crude dropped 0.4% to $63.30 a barrel by 20:35 ET (00:35 GMT).
OPEC+ Production Hike Speculation
Reuters reported Wednesday that the Organization of Petroleum Exporting Countries and its allies, known as OPEC+, will consider further raising oil output when it meets on Sunday. This news offset earlier expectations that the group would maintain current production levels after increasing output by more than 2.2 million barrels per day so far this year.
This year’s production boosts partially reversed deep cuts implemented over the past two years to support prices. Additional increases would further unwind previous reductions, reflecting OPEC+ efforts to reclaim market share and offset continued weakness in oil prices. However, actual output from some members has lagged behind pledged levels due to internal dissent, leaving markets well-supplied and potentially weighing on prices in the months ahead.
U.S. Inventory Data Signals Oversupply
Industry data from the American Petroleum Institute (API) showed U.S. crude inventories rose by 0.6 million barrels in the week ending August 29, compared with expectations for a 3.4 million-barrel draw. The API figures typically precede official readings from the Energy Information Administration, scheduled for release later Thursday.
Beyond inventory data, market attention this week focuses on U.S. nonfarm payrolls due Friday, which may offer clues on economic growth and interest rate trends. Soft economic indicators usually weigh on oil prices by dampening demand expectations. Earlier this week, purchasing managers’ index data showed U.S. manufacturing activity contracted for a sixth consecutive month.
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