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Oil

Oil prices edge lower as US pushes OPEC seen going ahead with output increase

Published: Updated:

Oil slipped on Tuesday as OPEC and allies geared up for a meeting on Wednesday amid calls from the United States to pump more crude, although Brent still traded well above $70 per barrel.

Prices were also under pressure from concerns that power outages and flooding in Louisiana after Hurricane Ida will cut crude demand from refineries.

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Crude was also weighed down by weaker manufacturing data from China, where factory activity expanded at a slower pace in August compared with the previous month.

US West Texas Intermediate (WTI) crude futures were down 74 cents, or 1.1 percent, at $68.47 a barrel as of 0955 GMT.

Brent crude futures for October, due to expire on Tuesday, fell 60 cents, or 0.8 percent, to $72.81 a barrel.

Both oil benchmarks were on track for their first monthly loss since March. But they were still not far off their July highs, when Brent rose to its strongest since 2018 and US crude since 2014.

In August, US President Joe Biden’s administration urged OPEC to boost oil output to tackle rising gasoline prices.

Prior to the US call, the Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, had agreed to add 400,000 barrels per day to their supply each month through December.

Sources told Reuters the Wednesday meeting will likely proceed with the plan without changes and despite pressure from the United States to pump more.

“It looks like sticking to the plan from the last meeting,” an OPEC+ source told Reuters.

Hurricane Ida, which made landfall in the United States on Sunday as a Category 4 hurricane, knocked out at least 94 percent of offshore Gulf of Mexico oil and gas production and caused “catastrophic” damage to Louisiana’s grid.

On the supply side, about 1.72 million bpd of oil production and 2.01 million cubic feet per day of natural gas output remained offline in the US side of the Gulf of Mexico following evacuations at 288 platforms.

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