Crude oil futures fall 1% on higher OPEC output survey

Catogory : Market Report

Brent crude futures were down more 1% in mid-morning trade in Asia Monday after OPEC producers increased crude output in September, easing global supply concerns. OPEC’s 15 countries boosted crude oil output in September to 33.07 million b/d, an 180,000 b/d rise from August, according to a source.

OPEC has been under fire from the US for refusing to increase output to counter rising oil prices, which have hit four-year highs in recent days, amid apprehension the producer bloc was unable or unwilling to make up for expected output losses from Venezuela and sanctions-hit Iran.

The 33.07 million barrels in September was the most OPEC has pumped since July 2017, if the Republic of Congo, which joined the organization in June, is not included, despite this, some market sources expected the rally in oil prices to continue. “Based on the dwindling spare capacity argument, the oil rally is far from over,” OANDA’s head of trading Stephen Innes said.

“Assuming additional capacity comes in at 2.5 million b/d as supported by the recent International Energy Agency data, the problem is that the capacity is quickly declining due to Asia’s insatiable demand,” he said.

Crude prices were also impacted by reports that the US was considering conditional exemptions to its sanctions on Iranian oil imports.

Brent crude oil prices gained 1.7% week on week, but closed marginally lower on Friday due to talk around the US considering exempting some importers from Iranian oil import restrictions,”