Oil broadly stable as Opec+ raises output

Brent crude futures were down 14 cents cents, or 0.1 per cent, at $100.40 a barrel by 1337GMT. West Texas Intermediate (WTI) crude futures slipped by 31 cents, or 0.3 per cent, to $94.11

Muzaffar Rizvi

Published: Wed 3 Aug 2022, 8:24 PM

Last updated: Wed 3 Aug 2022, 8:25 PM

Oil prices were broadly stable on Wednesday as the Opec+ producer group said it would raise its oil output target by only 100,000 barrels per day (bpd), dashing US hopes of a meaningful supply boost.

Weighing on prices, meanwhile, top Iranian and US officials said they were travelling to Vienna to resume indirect talks about Iran’s nuclear programme, reviving the all but vanished hopes of a removal of sanctions hampering Iranian oil exports.

Advertising

Brent crude futures were down 14 cents cents, or 0.1 per cent, at $100.40 a barrel by 1337GMT. West Texas Intermediate (WTI) crude futures slipped by 31 cents, or 0.3 per cent, to $94.11. Both contracts had seesawed previously.

The premium for front-month Brent futures over barrels loading in six months’ time is at a three-month low, indicating concern over tight supply are abating.

Ministers for members of the Organization of the Petroleum Exporting Countries (Opec) and allies including Russia, together known as Opec+, agreed the small increase to the group’s output target, equal to about 0.1 per cent of global oil demand.

While the United States has asked the group to boost output, spare capacity is limited and Saudi Arabia may be reluctant to beef up output at the expense of Opec+ partner Russia, hit by sanctions over the Ukraine conflict.

Ahead of the meeting, Opec+ trimmed its forecast for the oil market surplus this year by 200,000bpd to 800,000bpd, three delegates told Reuters.

Meanwhile, data from the American Petroleum Institute showed that US crude stocks rose by about 2.2 million barrels for the week ended July 29. Gasoline inventories fell by 200,000 barrels and distillate stocks by about 350,000 barrels.

Official data from the US Energy Information Administration (EIA) is due at 1430GMT. — Reuters