Oil prices dip on OPEC+ hike speculation; US inventories seen rising

Investing.com-- Oil prices fell in early Asian trade on Thursday, extending losses from the prior session after reports suggested that the OPEC+ was considering another output hike at an upcoming meeting.

Markets were also pressured by industry data pointing to a weekly increase in U.S. oil inventories, which furthered concerns over a post-summer cooldown in American fuel demand. 

Brent oil futures for November fell 0.4% to $67.35 a barrel, while West Texas Intermediate crude futures fell 0.4% to $63.30 a barrel by 20:35 ET (00:35 GMT). 

OPEC+ to consider another production hike at upcoming meeting- Reuters

Reuters reported on Wednesday that the Organization of Petroleum Exporting Countries and allies, known as OPEC+, will consider raising oil production further when it meets on Sunday.

The report offset earlier bets that the OPEC+ would keep output unchanged after hiking production by over 2.2 million barrels per day this year. 

This year’s output hikes partially reversed deep production cuts enacted by the OPEC+ in the past two years, as it sought to limit supplies and support oil prices. Additional output hikes will further reverse earlier production cuts.

Higher output quotas come as the OPEC+ seeks to recapture market share, with higher sales volumes expected to help offset persistent weakness in oil prices. 

Still, actual output increases from OPEC+ members have fallen short of the group’s pledges, amid some dissent among its ranks. 

But higher production points to well-supplied markets in the coming months, which likely bodes poorly for oil prices. 

US inventories see marginal but unexpected build- API 

Data from the American Petroleum Institute showed U.S. inventories grew 0.6 million barrels in the week to August 29, against market expectations for a 3.4 million barrel draw. 

The API data usually heralds a similar reading from official inventory data, from the Energy Information Administration, which is due later on Thursday. 

Beyond inventory data, focus this week is on key U.S. nonfarm payrolls data, due on Friday, for more cues on the economy and interest rates. Soft economic data usually weighs on oil prices by hurting the outlook for demand. 

Purchasing managers index data released earlier this week showed U.S. manufacturing activity contracting for a sixth consecutive month.