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Oil Posts First Weekly Loss in 3 Weeks
Oil prices fell for a third session on Friday, September 5, posting their first weekly loss in three weeks as expectations of increased supply and a surprise increase in U.S. crude inventories fueled demand concerns.
Reuters reported on Wednesday that eight OPEC+ members will consider increasing production at a meeting scheduled for Sunday. U.S. crude oil inventories rose by about 2.4 million barrels last week, contrary to analysts' expectations of a decline.
Brent crude futures fell $1.44, or 2.15%, to settle at $65.55 a barrel.
West Texas Intermediate (WTI) crude fell $1.61, or 2.54%, to settle at $61.87 a barrel.
OPEC+ Pressure and Potential Production Increase
ANZ analysts confirmed that market pressures continue due to expectations of increased supply from the OPEC+ alliance. Sources said that eight members of the OPEC+ alliance, which includes OPEC and Russia, will discuss raising production for October next Sunday. This move would begin unwinding an additional portion of the 1.65 million barrels per day (bpd) supply cut, equivalent to 1.6% of global demand, more than a year ahead of schedule.
"If the OPEC+ eight agree to a further production increase, we believe it will put significant downward pressure on oil prices. In any case, there is already a significant risk of oversupply," Commerzbank analysts said in a note.
US Data Increases Concerns
In the United States, data from the Energy Information Administration showed that crude oil inventories rose by 2.4 million barrels last week, compared to expectations for a draw of 2 million barrels, reflecting weak demand as refineries enter the maintenance season.
A report by BMI indicated that the strength of the refining sector has supported prices in recent months, but margins are likely to shrink soon as global demand growth slows and refinery throughput declines.
