Oil prices stable after US call for more oil raises supply concerns
- White House: OPEC + output is not enough, may harm global recovery
- White House not asking US oil producers to increase production
- US crude and gasoline inventories are falling; lower fuel consumption -EIA
SINGAPORE, Aug. 12 (Reuters) – Oil prices fell on Thursday after two days of rise after a call from the United States, the world’s largest consumer of oil, to major producers to increase production.
Brent crude futures fell 17 cents, or 0.2%, to $ 71.27 a barrel at 0650 GMT, after hitting a session high of $ 71.69.
US West Texas Intermediate (WTI) crude futures fell 23 cents, or 0.3%, to $ 69.02 after hitting $ 69.51 earlier.
“Crude prices are reducing earlier gains resulting from President Biden’s call for OPEC for more crude,” said Edward Moya, senior analyst at OANDA.
“The rally in oil prices hits a major hurdle in Asia as concerns grow. China’s outlook worsens this month and that can’t be good for the outlook for demand.”
The Biden administration on Wednesday urged the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC +, to increase oil production to cope with rising gasoline prices. ‘they see it as a threat to the global economic recovery. Read more
OPEC agreed in July to increase production each month by 400,000 bpd from the previous month, starting in August, until the remainder of their record cuts of 10 million bpd, or about 10 % of global demand made in 2020 be phased out.
However, there are still concerns that the increase may not be enough to meet demand as the United States and Europe relax their coronavirus-induced movement restrictions.
“The Biden administration has said the recently agreed production increases will not fully offset previous production cuts imposed during the pandemic,” ANZ said in a note.
The White House later said its OPEC + outreach was ongoing and aimed for long-term engagement, not necessarily an immediate response.
The administration added that it had not called on U.S. producers to increase production, which led the market to the upside on Wednesday, said Phil Flynn, senior analyst at Price Futures Group in Chicago.
Other data from the EIA report weighed on prices. U.S. crude oil inventories edged down last week, lagging behind expectations, while gasoline inventories plunged to their lowest level since November. The more volatile weekly demand figures also declined.
Oil prices had previously been boosted by a decline in the US dollar (.DXY), which can send speculative investors into greenback-denominated assets like commodities, and also after the US Senate passed a draft on Tuesday night. $ 1 trillion infrastructure bill. Read more
Reporting by Jessica Jaganathan; Edited by Christian Schmollinger
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