Oil futures were headed lower Thursday morning, with analysts blaming the slide on recent data showing that U.S. inventories were rising for the first time in eight weeks.
“Inventories rose as suppliers resumed activity to pre-pandemic levels after production was curbed in the Gulf of Mexico, after not one, but two hurricanes hit the region,” wrote Naeem Aslam, chief market analyst at AvaTrade, in a daily research note.
The EIA reported on Wednesday that U.S. crude inventories rose by 4.6 million barrels for the week ended Sept. 24. That defied expectations for an average decline of 4.5 million barrels expected by analysts polled by S&P Global Platts. The American Petroleum Institute on Tuesday reported a 4.1 million-barrel increase, according to sources.
November West Texas Intermediate crude CLX21, -1.30% was trading 69 cents, or 0.9%, lower at $74.14 a barrel on the New York Mercantile Exchange, following a 0.6% decline on Wednesday.
November Brent crude BRNX21, -0.88%, the global benchmark, was trading 58 cents, or 0.7%, lower at $78.06 a barrel on the ICE Futures Europe exchange, after it fell 0.6% a day ago, while the most-active December Brent contract BRNZ21 shed 73 cents, or 0.9%, to $77.36 a barrel, following its 0.3% decline a day ago.
For the month, WTI is headed for a gain of 8.4%, while Brent is on track for a rise in September of 8.2%. For the quarter, WTI is set for a climb of just 1%, while Brent is staring at a nearly 4% advance over the quarter ended Thursday, FactSet data show.
Moves for oil come as the Organization of the Petroleum Exporting Countries and allies, a group known as OPEC+, are set to meet on Monday to discuss their plans for global production in the recovery from the pandemic.
There are some signs that the global economic recovery could see some challenges, which could factor in OPEC’s thinking. There are growing signs that China, the world’s second-largest economy, and one of crude’s biggest importers, is seeing business activity decelerate. China’s manufacturing purchasing managers index fell to 49.6 in September, the National Bureau of Statistics in Beijing said Thursday, marking its first drop below 50, a dividing line between expansion and contraction, since February.
OPEC+ last met on Sept. 1 and agreed to adhere to its July agreement to raise overall production by 400,000 barrels a day each month from August and eventually erase the output curbs put in place last year due to weaker energy demand from pandemic-related economic restrictions.
The collective is expected to keep the current oil output agreement in place at its coming gathering, but there may be increasing pressures to boost with crude prices at elevated levels.
Read: Why OPEC+ is likely to keep its plan to boost oil output
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