I just got a call from one of our members based in New York. He told me that OPEC+ has confirmed a two month delay in their 180,000 bpd increase in export quotas that was set to begin in October.
LONDON (Reuters) -Oil firmed on Thursday, edging up from multi-month lows, due to a possible delay to output increases by OPEC+ producers and a decline in U.S. inventories, though gains were capped by persistent demand concerns.
Figures from the American Petroleum Institute (API) showed U.S. crude oil inventories fell by 7.431 million barrels last week, far exceeding the 1 million barrel draw expected by analysts in a Reuters poll.
"There is a pause of breath and light reprieve for oil prices," said PVM analyst John Evans, citing the API report's findings.
Further support came from discussions between the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia, known collectively as OPEC+, about delaying output increases due to start in October, sources told Reuters on Wednesday.
Any decision by OPEC+ might be taken negatively by the market, HSBC said in a report.
"Raising production would tip the market into a meaningful surplus from Q1 2025 onwards. On the other hand, holding off may be interpreted as a belated admission by OPEC that oil demand is weak."
OPEC+ had been ready to proceed with an output increase of 180,000 barrels per day (bpd) in October, part of plans for a gradual unwinding of its most recent cuts of 2.2 million bpd.
However, continued soft demand in China and the potential end of a dispute halting Libyan oil exports has pushed the group to reconsider.
Official U.S. oil stocks data from the Energy Information Administration (EIA) is due at 1430 GMT. < Has been delayed to 11AM ET
Financial markets were also awaiting further U.S. macroeconomic indicators due later on Thursday and Friday, including jobs data.
OPEC+ backing off production increase - Sept 5
OPEC+ backing off production increase - Sept 5
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: OPEC+ backing off production increase - Sept 5
This is an admission by OPEC that there is a glut of oil and not enough demand.
Oil benchmarks failed to hold intraday gains to finish flat Thursday, maintaining their lowest levels this year, as worries about demand in the U.S. and China and an anticipated boost in supplies out of Libya offset an unexpectedly large withdrawal from U.S. crude inventories and news of a two-month delay by OPEC+ in starting to unwind production cuts.
OPEC+ said it will extend additional voluntary cuts until the beginning of December instead of starting to pare them back in October, which should stabilize prices around the low $70s, Peter Cardillo of Spartan Capital said, according to Dow Jones.
Mizuho's Robert Yawger was not impressed with the move, saying the "gasoline market would be capable of cratering crude oil even if the OPEC+ chaos was not leaning on [the] price. If you don't need the gasoline, you don't need the crude oil to make gasoline."
Oil benchmarks failed to hold intraday gains to finish flat Thursday, maintaining their lowest levels this year, as worries about demand in the U.S. and China and an anticipated boost in supplies out of Libya offset an unexpectedly large withdrawal from U.S. crude inventories and news of a two-month delay by OPEC+ in starting to unwind production cuts.
OPEC+ said it will extend additional voluntary cuts until the beginning of December instead of starting to pare them back in October, which should stabilize prices around the low $70s, Peter Cardillo of Spartan Capital said, according to Dow Jones.
Mizuho's Robert Yawger was not impressed with the move, saying the "gasoline market would be capable of cratering crude oil even if the OPEC+ chaos was not leaning on [the] price. If you don't need the gasoline, you don't need the crude oil to make gasoline."