Brent Falls to $96 as OPEC+ Adds 100,000bpd, US Stockpiles Rise

By Adedapo Adesanya

Brent crude fell below $100 per barrel on Wednesday as the Organisation of the Petroleum Exporting Countries and allies (OPEC+) said it would raise its oil output target by 100,000 barrels per day and crude stockpiles jumped in the United States.

This lowered the price of the international crude benchmark by $3.76 or 3.7 per cent to $96.78 per barrel and weakened the US West Texas Intermediate (WTI) crude futures by $3.76 or 4 per cent to $90.66 per barrel.

OPEC+ on Wednesday said it will add only 100,000 barrels a day of oil in September, giving a tight market extra supplies at a much slower pace than in recent months despite pressure to cool prices.

The 23-nation alliance will divide that amount proportionally between members, and with only the Saudis and the United Arab Emirates able to bolster production, just a fraction of it is likely to be delivered. For July and August, the group had pledged to add more than 600,000 barrels a day to the market.

The increase, equivalent to 0.1 per cent of global demand, follows weeks of speculation that the trip of President Joe Biden of the United States to the Middle East will bring more oil to the world market.

There were no discussions about whether the oil cartel would keep increasing production in subsequent months, delegates said. The group meets again on September 5.

The increase offers little respite for consumers suffering the inflationary squeeze of high oil prices.

The market was also pressured as US crude oil inventories rose unexpectedly last week as exports fell and refiners lowered runs.

Crude stocks rose 4.5 million barrels last week, compared with an analyst forecast for a draw of 600,000 barrels.

Also weighing on prices, Iranian and US officials said they were travelling to Vienna to resume indirect talks about Iran’s nuclear programme, reviving the all but vanished hopes of removal of sanctions hampering Iranian oil exports.

The US Dollar index, which tracks the greenback against six major peers, also rose, pressuring demand by making oil more expensive for holders of other currencies.