Oil prices stabilised on Thursday, showing slight gains after hitting multi-month lows. This upward movement was driven by a potential delay in production increases from OPEC+ and a significant decline in U.S. oil inventories. However, lingering concerns about global demand kept the gains modest.
The American Petroleum Institute (API) reported that U.S. crude inventories fell by 7.431 million barrels last week, much larger than the 1 million barrel drop predicted by analysts. John Evans, an analyst at PVM, pointed out that this news provided a brief respite for oil prices. By 1300 GMT, Brent crude for November had risen by 66 cents, reaching $73.36 a barrel, while U.S. West Texas Intermediate for October gained 64 cents, trading at $69.84. Both benchmarks had rebounded from Wednesday’s low levels.
Further optimism was supported by discussions within OPEC+ about delaying planned output increases set for October. These discussions, led by the Organisation of the Petroleum Exporting Countries and its allies, including Russia, signal that a final decision could influence market sentiment. HSBC noted that while raising production might lead to an oversupply by early 2025, delaying the increase could suggest OPEC+ is acknowledging weaker demand.
Initially, OPEC+ had been preparing to boost output by 180,000 barrels per day in October as part of a phased unwinding of previous cuts totalling 2.2 million barrels per day. However, lower demand in China and the possible resolution of a conflict that had halted Libyan oil exports prompted the group to reconsider its strategy.
Traders were also awaiting official U.S. oil stock data from the Energy Information Administration, set for release later in the day, along with key U.S. macroeconomic indicators, including job market data expected on Thursday and Friday.
Challenger Energy Group plc (LON:CEG) is a Caribbean and Atlantic margin focused oil and gas company, with a range of petroleum assets located onshore in Trinidad and Tobago, and Suriname, and offshore in the waters of The Bahamas and Uruguay.
