Oil prices rose on Thursday as supply concerns triggered a rebound from multi-month lows plumbed in the previous session after US data signalled weak fuel demand.
Brent crude futures rose 42 cents, or 0.4 percent, at $97.20 a barrel, while West Texas Intermediate (WTI) crude CLc1 futures was last up 49 cents, a 0.5 percent gain, at $91.15.
Both benchmarks fell to their weakest levels since February in the previous session after US data showed crude and gasoline stockpiles unexpectedly surged last week and as OPEC+ agreed to raise its oil output target by 100,000 barrels per day (bpd), equal to about 0.1 percent of global oil demand.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, known as OPEC+, have been previously increasing production but have struggled to meet targets as most members have already exhausted their output potential.
“OPEC+ agreed to increase production by 100,000 barrels per day in September, far lower than previous months’ production. The global energy market still faces supply shortages,” said Leon Li, an analyst at CMC Markets.
He added that WTI oil prices are “likely to oscillate” between $90 and $100 a barrel.
While the United States has asked the group to boost output, spare capacity is limited and Saudi Arabia may be reluctant to beef up production at the expense of Russia, hit by sanctions over the Ukraine invasion that Moscow calls “a special operation”.
Ahead of the meeting, OPEC+ had trimmed its forecast for the oil market surplus this year by 200,000 barrels per day (bpd) to 800,000 bpd, three delegates told Reuters.
“It looks like OPEC+ is resisting calls to boost output because the crude demand outlook continues to get slashed. The world is battling the ongoing global energy crisis and it won’t be getting any help from OPEC+,” Edward Moya, senior analyst with OANDA, said in a note. – Reuters
