WTI Crude Oil Contract Closes Down $1.13; Settles at $65.16 per Barrel

The September WTI Crude Oil Contract closed down $1.13, settling at $65.16 per barrel. The decline was attributed to concerns about OPEC+ supply and weak US jobs data. Despite this, Eni and Ivory Coast signed a new offshore oil contract. US drillers cut oil and gas rigs for the second week in a row, according to Baker Hughes.

OPEC+ has reached a preliminary agreement to increase oil production by 548,000 barrels per day (bpd) in September, according to two sources within the group who spoke on Sunday [1]. The move comes as OPEC+ nears the completion of unwinding its largest round of production cuts, amid ongoing concerns over potential supply disruptions from Russia.

The final decision is expected at a meeting scheduled for 11:00 GMT. The talks come amid renewed pressure from the United States on India to halt its purchases of Russian oil, as Washington seeks to strengthen its leverage over Moscow in pursuit of a peace agreement with Ukraine. Meanwhile, new European Union sanctions have prompted Indian state-run refiners to suspend Russian oil imports.

OPEC+, which pumps about half of the world’s oil, had been curtailing production for several years to support the market. However, it reversed course this year to regain market share, as U.S. President Donald Trump demanded OPEC pump more oil. OPEC+ began output increases in April with a modest hike of 138,000 bpd, followed by larger hikes of 411,000 bpd in May, June, and July and 548,000 bpd in August.

If the group agrees to the 548,000-bpd September increase, it will have fully unwound its previous production cut of 2.2 million bpd while allowing the United Arab Emirates to raise output by 300,000 bpd. OPEC+ still has in place a separate, voluntary cut of about 1.65 million bpd from eight members and a 2-million-bpd cut across all members, which expires at the end of 2026.

Despite the positive news from OPEC+, the September WTI Crude Oil Contract closed down $1.13, settling at $65.16 per barrel. The decline was attributed to concerns about OPEC+ supply and weak US jobs data. The drop in crude prices comes as US drillers cut oil and gas rigs for the second week in a row, according to Baker Hughes [2].

Eni and Ivory Coast signed a new offshore oil contract, signaling continued exploration and production activities in the region [2]. The contract highlights the ongoing efforts to diversify oil supply sources globally.

References:
[1] https://von.gov.ng/opec-agrees-to-boost-oil-output-in-september/
[2] https://www.marketscreener.com/news/sliding-us-rig-count-outpaces-efficiency-gains-threatening-onshore-oil-output-ce7c5edbde89f02d