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Oil prices have stabilised as major producers, including OPEC+ members, contemplate postponing a planned increase in output due to recent market challenges.
OPEC+ was scheduled to raise production by 180,000 barrels per day in October to offset previous cuts.
However, concerns about weak demand from China and the potential resolution of supply disruptions in Libya have prompted discussions about delaying this production increase to stabilize the market.
Additionally, a sharp drop in U.S. crude and fuel inventories has influenced market sentiment. The American Petroleum Institute (API) reported a significant 7.4 million barrel decline in U.S. crude stocks for the week ending August 30, far surpassing expectations of a 900,000 barrel drop. This decline followed a 3.4 million barrel reduction the previous week. Despite these declining inventory figures, the downside risks in oil prices persist, driven by weaker market risk appetite, as U.S. and China data disappoints.
Meanwhile, the focus shifts to the upcoming EIA crude oil inventories data for the week ending August 30. The market anticipates a 0.6 million barrel decline, which, combined with the previous week’s 0.846 million barrel drop, could stabilize crude prices in the near term due to tighter inventories.
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