FX.co ★ Oil Declines Further

WTI crude oil futures dropped to $62 per barrel on Friday, continuing the significant declines observed over the previous two sessions due to abundant supply and uncertain demand. Reports indicate that OPEC+ is poised to further increase its oil production quotas at its upcoming meeting this weekend, with Saudi Arabia, the group's leading nation, spearheading the initiative. This potential output hike comes at a time when the oil market is already experiencing excess supply, fueled by high production levels from non-OPEC+ members and waning demand from the world's largest fuel consumers. The cartel is striving to regain its market share after the pandemic-related cuts, as numerous member nations aim to bolster their government budgets. Despite a slowdown in manufacturing activity, tanker movements have revealed a surge in Russian oil exports to China, which are compensating for the decreased demand from India following the US's imposition of tariffs. Meanwhile, EIA data highlights an unexpected rise of 2.4 million barrels in US oil inventories during the last week of August.