By Adedapo Adesanya
Oil prices settled lower on Thursday as traders weighed a worsening economic outlook against potential output cuts next week.
Brent crude futures declined by 83 cents to trade at $88.49 per barrel as the US crude futures went down by 92 cents to finish at $81.23 per barrel.
Leading members of the Organisation of the Petroleum Exporting Countries and allies (OPEC+) have begun discussing an oil output cut at their next meeting on October 5.
The Brent and WTI are on track to rise by about 3 per cent for the week, their first weekly rise since August, after hitting nine-month lows earlier in the week.
For all of September, Brent is set to drop by 8 per cent, down for a fourth month.
During the third quarter, Brent plunged 23 per cent, its first quarterly loss since the fourth quarter of 2021.
WTI is set to fall by 9 per cent in September, its fourth monthly decline, and it dropped by 23 per cent during the quarter, the first quarterly slump since the period ending in March 2020 when COVID-19 slammed demand.
This week, Russia is likely to propose that OPEC+ reduce oil output by about 1 million barrels per day.
Analysts pointed out that at the moment, the oil market is teetering between the US Fed-induced demand destruction and tight oil supplies.
Amid so much uncertainty, analysts also believe that unless the market gets more clarity from OPEC+ on the likely size of any adjustment and what it means for previously missed quotas, the market will be swayed bullish.
The prices also came under pressure as the threat of Hurricane Ian receded, with US oil production expected to return in the coming days after about 158,000 barrels per day was shut in the Gulf of Mexico as of Wednesday.
In China, the world’s biggest crude oil importer, travel during the forthcoming week-long national holiday is set to hit its lowest level in years as the country’s zero-COVID rules keep people at home while economic woes curb spending.
The US Dollar index dropped again on Thursday, easing off 20-year highs, indicating some more risk appetite from investors.
Further support for oil prices could come from the United States, which is announcing new sanctions against companies that facilitated Iranian oil sales.
