FX.co ★ Oil Slips on Supply Concerns

WTI crude oil futures decreased, approaching $63 per barrel on Thursday, continuing a 2.5% decline from the day before. This drop comes amid concerns that OPEC+ might increase oil supply. Reports have surfaced that the organization will debate new production hikes during its upcoming policy meeting this weekend. The intention behind this move is to recuperate market share, potentially prompting the group to begin reversing 1.65 million barrels per day (bpd) of previously implemented production cuts. This accounts for approximately 1.6% of global demand. OPEC+ had earlier decided to elevate production targets by 2.2 million bpd spanning from April to September, alongside an additional 300,000 bpd specifically for the UAE. However, actual output increases have fallen short due to earlier production adjustments and capacity constraints among some member countries. Compounding the downward pressure, US crude oil inventories unexpectedly grew by 0.6 million barrels last week, countering forecasts of a 3.4 million-barrel drawdown. This suggests waning demand and increased supply. Moreover, the outlook for fuel demand was further dimmed by economic data indicating a slowdown in the US.