WASHINGTON (dpa-AFX) - Crude oil moved sharply lower on Friday as oversupply concerns grow stronger ahead of the OPEC+ alliance's Sunday meeting, where reportedly plans for an output increase are in place.
WTI Crude Oil for October delivery was last seen trading down by $1.64 (or 2.58%) at $61.84 per barrel.
Traders are laser-focused on the upcoming OPEC+ meeting on Sunday, where (according to Reuters) the eight member-nation alliance is possibly planning to push for higher output in October. Any hike would follow their 2.2 million barrels per day of expansion of output so far in 2025. A steep increase could lead to oversupply in the market and weigh on oil prices.
Last month, the alliance approved a 547,000 barrels per day increase for September to finish returning the 2.2 million barrels per day kept offline since 2023.
According to a Bloomberg survey, OPEC produced 28.55 million barrels of crude oil per day in August; 400,000 barrels per day more than in the previous month.
While Saudi Arabia produced less than agreed in July and August, output by OPEC nations exceeded their agreed level by 340,000 barrels per day.
On the inventory front, yesterday the US Energy Information Administration reported that oil stockpiles in the US rose by 2.415 million barrels versus an expected decline of 1.80 million barrels.
Rising oil inventories indicate a slowdown in energy demand, which results in a decline in the oil price.
The US jobs data released by the Labor Department revealed non-farm payroll employment crept up by just 22,000 jobs in August after climbing by an upwardly revised 79,000 jobs in July. The unemployment rate accelerated to 4.3% from the previous 4.2%.
On the monetary front, the US Federal Reserve's next monetary policy meeting to decide on interest rates is scheduled to be held in September 16-17. With the current benchmark rate set at 4.25% to 4.50%, today's weak jobs data has strongly boosted expectations of an interest rate cut.
On the geopolitical front, the conflict between Russia and Ukraine is showing no sign of coming to an end despite the intervention of the US and the West due to Russia's obstinacy. Russia is potentially facing heavy sanctions on its oil exports by the US as it has ignored calls for a ceasefire.
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