Oil Futures Fall on OPEC+ Hike Talk, API Data Ahead

Oil Futures Fall on OPEC + Hike Talk

DAVENPORT, FL (DTN) – Oil prices settled lower Wednesday as reports surfaced that the Organization of Petroleum Exporting Countries and its partners are considering another round of production hikes at their upcoming meeting on Sunday.

NYMEX West Texas Intermediate crude for October delivery fell $1.62 to settle at $63.97 bbl, and ICE November Brent declined $1.62 to $67.48 bbl. October RBOB futures slipped 3.60cts to $2.012 gal, while the October ULSD contract fell 1.35cts to $2.3609 gal. The U.S. dollar index weakened 0.260 points to 98.060.

Analysts had largely expected OPEC+ to pause output increases in October. The recent series of monthly supply hikes was part of the unwinding of some 2.2 million bpd in voluntary production cuts shouldered by eight member states, achieved by last month’s quota increase.

The news added to concerns over a growing supply-demand imbalance. Market participants already anticipated the global oil market to be oversupplied by year’s end amid sluggish demand growth and steady non-OPEC output. In recent months, OPEC not only stepped up the pace of output hikes on paper but has steadily inched closer to realizing them in practice.

The focus now shifts to U.S. inventory data from the American Petroleum Institute, scheduled for release at 4:30 p.m. ET. Expectations point to draws in crude, gasoline, and distillate stocks. Attention will also be on Thursday’s initial jobless claims data for further indications on the strength of the U.S. labor market.