Oil extends losses amid higher OPEC output

Oil prices extended losses on Thursday, following yesterday’s slide that came after official data showed an increase in US crude inventories.

Additionally, latest reports showed that the Organization of Petroleum Exporting Countries (OPEC) output had climbed in July, with Saudi Arabia pumping near-record volumes.

Brent crude futures were last trading down 0.2 percent at $72.24 per barrel (bbl), while West Texas Intermediate (WTI) crude fell 0.3 percent to $67.43.

OPEC’s production is said to have grown by 300,000 barrels per day (bpd) in July, while Saudi Arabia’s oil production rose by 230,000 bpd last month, to 10.65 million bpd, marginally lower than an all-time peak reached in 2016, according to Bloomberg.

“Rising Saudi Arabian and Russian oil supply coupled with concerns about demand due to the further escalating trade conflict between the US and China, the two largest oil consumer countries, are weighing on the price,” Commerzbank said in its latest update.

Earlier on Wednesday, Brent crude shed nearly 2.5 percent after the Energy Information Administration (EIA) data showed that US commercial stockpiles of crude oil rose by 3.8 million barrels last week. 

Meanwhile, the benchmark grade closed July with a monthly decline of more than 6 percent – the biggest monthly fall for the benchmark since July 2016.

“The technical perspective is displaying signs of exhaustion from the bulls, with prices failing to keep above the stubborn $70 resistance level on repeated occasions,” Lukman Otunuga, research analyst at FXTM, said in a note.

“A solid breakdown below $67.7 could inspire a decline towards $67.00 and $66.60, respectively,” he added.

Write to Nadeshda Zareen at nadeshda.zareen@argaamplus.com