Brent falls on OPEC+ output glut fears
The front-month ICE Brent contract has declined by $1.04/bbl on the day, to trade at $64.60/bbl at 09.00 GMT.
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Upward pressure:
Brent’s price has found some support after the weekly official US oil stocks figures from the US Energy Information Administration (EIA) were released yesterday.
Commercial US crude oil inventories have decreased by about 2.8 million bbls to touch 440 million bbls for the week ending 23 May, according to data from the EIA.
“US inventory data added a little light to the gloomy outlook,” ANZ Bank’s senior commodity strategist Daniel Hynes remarked.
Earlier this week, the American Petroleum Institute reported a larger draw of 4.2 million bbls for the same week.
A drop in US crude stocks typically indicates higher demand and can lend some support to Brent's price.
Downward pressure:
Brent crude’s price has slipped on growing concerns over a potential supply glut from OPEC+.
Kazakhstan does not plan to cut oil production in July, its deputy energy minister Alibek Zhamauov said, according to a Reuters report citing Russia’s Interfax news agency.
The Saudi Arabia-led alliance is widely expected to increase output for the third consecutive time at its upcoming meeting on Saturday.
The group of eight OPEC+ members, currently unwinding the 2.2 million b/d of output cuts, are expected to raise their collective production target by 411,000 b/d in July.
“The exact size of the hike is to be announced at the meeting but is expected to be larger than currently scheduled,” Hynes remarked.
By Aparupa Mazumder
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