Oil prices experienced a dip after a volatile trading session, influenced by speculation that OPEC+ might accelerate output increases despite growing US crude stockpiles. West Texas Intermediate (WTI) crude fell almost 1 per cent to settle near $US62 a barrel, marking its third consecutive day of declines. Market participants are anticipating that OPEC+ will consider further production increases when the group convenes this weekend, although the alliance has stated it currently has no plans to do so.
“Any added barrels to global supply will be taken as a major negative by traders,” noted Dennis Kissler, a trader at BOK Financial, highlighting the market’s sensitivity to potential supply increases. The rising oil inventories in the US contributed to concerns about oversupply.
According to the Energy Information Administration, US crude oil reserves increased by 1.79 million barrels last week, while petrol and distillate inventories also saw expansions. A decline in US petrol consumption to a six-month low further pressured futures, raising worries about weakening near-term demand. This confluence of factors continues to weigh on oil market sentiment.
The energy market is navigating a complex landscape of supply considerations and demand signals. Traders are closely monitoring OPEC+ decisions and assessing inventory data to gauge the direction of prices in the coming weeks. The balance between supply and demand will likely dictate price movements in the near term.
