Oil Prices Crash to 6-Month Low After Exporters Announce Production Boost

Oil prices fell on Thursday with Brent crude falling to a near 6-month low after the Organization of Petroleum Exporting Countries (OPEC+) nations decided to enhance crude production in September.

The world’s most traded commodity also fell as supply fears spurred a comeback from multi-month lows hit the previous day following dismal fuel demand data from the United States.

Currently, Brent crude is down $0.41, or 0.42 percent at $96.37 a barrel after briefly going up by 10 cents. The US West Texas Intermediate (WTI) crude lost $0.26, or 0.29 percent, to sit at $90.40 per barrel after markets resumed trade in red on Thursday. The last time crude traded at such levels was in mid-February 2022 when prices remained in the $89-96 range.

International energy data analyzing agencies said on Thursday that crude oil stockpiles in the United States increased unexpectedly last week as exports declined and refiners reduced runs, while stocks also increased unexpectedly as demand slowed.

Crude stockpiles increased by 4.5 million barrels last week, above market expectations of a 600,000-barrel drop. Against estimates of a 1.6 million-barrel reduction, fuel stockpiles increased by 200,000 barrels, taking the crude oil number well above expectations for Brent merchants.

The OPEC+ and its allies, including Russia, agreed on a slight increase in the group’s output target, equivalent to around 0.1 percent of world oil demand, causing WTI futures for September to drop by $3.

While the US has encouraged the OPEC+ members to increase output, Saudi Arabia may be hesitant to increase output at the expense of Russia, which is facing sanctions as a result of its “special operation” on Ukraine.

Oil prices also dropped after Iranian and US officials announced plans to fly to Vienna to begin indirect discussions regarding Iran’s nuclear program, resurrecting hopes for the lifting of sanctions that have stifled Iranian oil exports for years.

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