Oil prices fell about 1% in early trade on Wednesday before
paring some losses, ahead of a meeting OPEC+ producers on fears of
a slowdown in global growth hitting fuel demand and a firmer
dollar, Trend reports with reference to Reuters .
Brent crude futures were last down 38 cents, or 0.4%, at $100.16
a barrel at 0345 GMT. West Texas Intermediate (WTI) crude futures
slid 35 cents, or 0.4%, to $94.07 a barrel.
The Organization of the Petroleum Exporting Countries and allies
including Russia, together known as OPEC+, meet on Wednesday. OPEC+
sources told Reuters last week that the group will likely keep
output unchanged in September, or raise it slightly.
Analysts are expecting no change due to a weak outlook for
demand as recession fears grow, and said top producer Saudi Arabia
may be reluctant to beef up output at the expense of OPEC+ partner
Russia, hit by sanctions due to the Ukraine conflict.
'This week's main event for oil remains today's OPEC+ decision
and that should keep prices somewhat rangebound until OPEC and its
partners decide what to do with September's output,' Edward Moya,
senior market analyst at OANDA, told Reuters.
He added that the organization has a strong case to stand by
their standard increase of 400,000 barrels a day.
'OPEC+ is not even coming close to hitting their production
targets, so oil prices will likely remain supported even if they
announce a small output increase for September,' he said.
Ahead of the meeting, OPEC+ trimmed its forecast for an oil
market surplus this year by 200,000 barrels per day (bpd) to
800,000 bpd, three delegates told Reuters.
Several factors are weighing on the demand outlook, including
rising fears of an economic slump in the United States and Europe,
debt distress in emerging market economies, and China's COVID-zero
policy curbing activity in the world's top oil importer,
Commonwealth Bank analyst Vivek Dhar said.
'We see growing downside risks to our oil price forecast of
$US100/bbl in Q4 2022 as global demand concerns continue to grow,'
Dhar said in a note.
A stronger dollar, bolstered by comments from U.S. Federal
Reserve officials hinting at more interest rate hikes to cool
inflation, also weighed on oil prices as a firmer greenback makes
oil more expensive for holders of other currencies.
Adding to the bearish view on demand, data from the American
Petroleum Institute, an industry group, showed U.S. crude stocks
rose by about 2.2 million barrels for the week ended July 29,
against analysts' expectations for a decline of around 600,000
Gasoline inventories fell by 200,000 barrels, which was a
smaller drawdown than analysts had expected, however distillate
stocks fell by about 350,000 barrels against analysts' forecasts
for a build.
The market will be looking to see if official data from the U.S.
Energy Information Administration (EIA) at 1430 GMT confirms the
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