SINGAPORE: Oil prices edged higher on Monday, paring earlier losses, as traders expect the market to absorb another large output hike by OPEC+ in September, while worries about disruptions to Russian oil shipments to major importer India also provided support.
Brent crude futures climbed 11 cents, or 0.16 percent, to $69.78 a barrel by 8:47 a.m. Saudi time, and US West Texas Intermediate crude was at $67.52 a barrel, up 19 cents, or 0.28 percent. Both contracts closed about $2 a barrel lower on Friday.
The Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, agreed on Sunday to raise oil production by 547,000 barrels per day for September, the latest in a series of accelerated output hikes to regain market share. It cited a healthy economy and low stockpiles as reasons behind its decision.
The move, in line with market expectations, marks a full and early reversal of OPEC+’s largest tranche of output cuts, plus a separate increase in output for the UAE, amounting to about 2.5 million bpd, or about 2.4 percent of world demand. “
This additional production appears to have little impact because it was so well flagged ahead of time,” said Michael McCarthy, chief executive officer of online trading platform Moomoo Australia.
