Oil Prices Reversed Gains

Oil prices reversed gains Thursday, despite a larger decline in weekly crude stocks and OPEC+ delaying output increase plans by two months.

At 14:02 p.m. EST (1802 GMT), Nymex crude oil futures were down 0.4% to $69.84 a barrel, while the Brent contract fell 0.3% to $72.52 a barrel.

OPEC+ Delays Output Hikes by Two Months

OPEC+ announced that it would delay its plans to increase output in October by two months. This delay allows members who had overproduced crude to align with the voluntary production cut agreement.

Initially, OPEC+ had been planning on a 180,000 barrel-per-day output increase starting in October to ease production cuts. However, due to overproduction by Iraq and Kazakhstan since January 2024, OPEC+ aims for full compliance from all members.

The two-month delay coincides with a weak outlook for crude demand, particularly due to economic uncertainties in China. The plan to phase out production cuts is now set to commence in December 2023, extending to November 2025.

U.S. Crude Stocks Fall More Than Expected

U.S. crude oil stocks experienced a significant decrease of 6.9 million barrels for the week ending August 30, surpassing the anticipated reduction of 600,000 barrels due to lower imports.

Conversely, gasoline stocks increased more than predicted as the summer driving season concluded.

The end of summer driving signals an anticipated decline in refining activities ahead of the maintenance season, typically beginning around mid-September.

Refinery activity remained steady at 93.3%, with crude inputs averaging about 16.9 million barrels per day, a rise of 36,000 barrels from the previous week, according to the EIA.