Oil prices ease after Opec+ sticks to output strategy

Oil prices dipped in volatile trading on Thursday as concerns about supply appeared to outweigh an increase in US fuel product inventories after Opec+ decided stick to its measured output strategy.

Brent crude futures for September, the more actively traded contract, were down 96c, or 0.9%, at $111.49 a barrel by 12.25pm GMT. The August contract, which expires on Thursday, was down 78c, or 0.7%, at $115.48.

West Texas Intermediate futures fell $1.25, or 1.1%, to $108.53.

The Opec+ group of producers including Russia on Thursday agreed to stick to its output strategy after two days of meetings, sources said.

Sanctions on Russian oil since Russia’s invasion of Ukraine have helped to send energy prices soaring, stoking inflation and recession fears.

Crude inventories fell by 2.8million barrels in the week to June 24, US Energy Information Administration data shows, far exceeding the 569,000-barrel drop forecast in a Reuters survey of analysts.

However, fuel stocks rose as refiners ramped up activity, operating at nearly full capacity, the highest at this time of year in four years.

“The net drop in crude oil inventories was flattered by SPR [Strategic Petroleum Reserve] releases, while the gasoline [petroleum] stock jump is because US refineries are running at over 95% capacity,” said Jeffrey Halley, Oanda’s senior market analyst for Asia-pacific.

Further disruptions to supply could limit price declines after Libyan shipments from two eastern ports were suspended, while Ecuador output fell because of continuing protests.

Exports of Ecuador’s Oriente crude remain suspended under a force majeure declaration as the spread of anti-government protests hurt oil output, staterun Petroecuador said on Wednesday.