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Off Worst Levels; OPEC+ Decision Eyed

OIL

WTI is ~-$0.30 and Brent is ~-$0.40, paring earlier losses of as much as ~$1.00-1.20 apiece at typing. Both benchmarks operate a short distance above their respective, recently-made multi-week lows ahead of the OPEC+ decision due later today, with focus centred on a potential output increase from the group.

  • To elaborate, WSJ source reports have pointed to OPEC+ considering proposals for output increases at today’s meeting, corroborating earlier, separate source reports re: the matter from both RTRS and a Fox Business news reporter.
  • On the sidelines, note that RTRS source reports on Tuesday pointed to the OPEC+ Joint Technical Committee (JTC) lowering their forecasted surplus in global oil markets (from 1.0mn bpd in their July forecast to 800K bpd).
  • Brent’s prompt spread continues to moderate, printing ~$1.84 at typing, down from its peak at ~$2.80 just earlier this week.
  • Elsewhere, the latest round of U.S. API inventory estimates crossed on Tuesday, with oil prices edging lower after reports pointed to a surprise build in crude stockpiles. Cushing hub stocks rose, while there was a drawdown in gasoline and distillate inventories.
  • Looking ahead, U.S. EIA inventory data is due, with WSJ estimates calling for a drawdown in crude stocks.

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