Oil Prices Fall Despite OPEC+ Delaying Planned Production Increases By Investing.com

Investing.com — Oil prices reversed gains on Thursday, shrugging off a much larger drop in weekly crude inventories and OPEC+ delaying plans to raise output by two months.

At 2:02 pm EST (1802 GMT), Nymex crude futures were down 0.4% at $69.84 a barrel, while the contract was down 0.3% at $72.52 dollars per barrel.

OPEC+ postpones production increase by two months

OPEC+ said it was scrapping plans to raise production in October by two months to allow members of the group that has been overproducing crude to bring production in line with the voluntary output cut agreement.

OPEC and its allies, or OPEC+, had tipped for a production increase of 180,000 barrels per day in October as part of its plan to ease production cuts.

But Iraq and Kazakhstan have overproduced since January 2024, and the group said it “wants to ensure full compliance by all members.”

The two-month delay comes as the weak outlook for crude oil demand, driven by the continued faltering of China’s economy, has raised concerns within the group. The plan to phase out production cuts is now scheduled to start in December this year, but not until November 2025.

U.S. crude oil inventories fall more than expected

Oil inventories fell 6.9 million barrels in the week ended Aug. 30, a sharper drop than the 600,000-barrel drop expected, driven by lower imports.

Gasoline stocks, however, rose more than expected as the US summer driving season, a period of strong demand, moved into the rearview mirror.

The end of the summer driving season usually heralds a period of weaker refining activity ahead of the maintenance season, which usually begins in mid-September.

Refinery activity was unchanged from the previous week at 93.3 percent, with crude inputs averaging about 16.9 million barrels per day, up 36,000 barrels from the previous week, the EIA said.