Oil Extends Losses on OPEC Hike Reports, US Stock Builds

Oil Extends Losses on OPEC Hike Reports

VIENNA (DTN) – Oil prices continued to slide Thursday morning, extending the sell-off triggered by reports that the Organization of Petroleum Exporting Countries and its partners will be considering another round of production hikes at their next meeting this Sunday (9/7). An industry report showing growing U.S. crude oil and distillate stockpiles added to bearish pressure.

NYMEX-traded WTI for October delivery fell $0.64 to trade near $63.33 bbl, and ICE Brent for November delivery declined $0.67 to $66.93 bbl.

October RBOB gasoline futures added $0.0020 to $2.0140 gal, while the front-month ULSD contract was down $0.0451 to $2.3158 gal.

The U.S. dollar index strengthened by 0.117 points to 98.200.

OPEC+ had pivoted earlier this year from a strategy solely focused on defending price to one centered on defending market share from non-OPEC producers by considerably hiking oil output and raising production ceilings. Given the pace of recent supply additions, however, market observers had largely expected OPEC+ to pause output increases in October. Reports of the producer group considering another hike added to concerns over the global oil market slipping into oversupply.

The American Petroleum Institute on Wednesday reported that U.S. commercial crude oil inventories expanded by 622,000 bbls last week, with stocks at the Cushing, Oklahoma tank farm, the delivery point for WTI futures, growing by 2.06 million bbls. API also reported a sizable 3.67 million bbl build in distillate fuel oil inventories, which, combined with the large expansion in Cushing stocks, further weighed on prices.