By Scott DiSavino
NEW YORK (Reuters) -Oil prices eased about 1% to a two-week low on Thursday on a surprise build in U.S. crude inventories last week and expectations that OPEC+ producers will increase output targets at a meeting this weekend.
Brent crude futures fell 65 cents, or 1.0%, to settle at $66.95 a barrel, while U.S. West Texas Intermediate crude fell 49 cents, or 0.8%, to settle at $63.48.
That was the lowest close for Brent since August 20.
The U.S. Energy Information Administration said energy firms added 2.4 million barrels of crude into storage during the week ended August 29 as refineries headed into maintenance season. [EIA/S] [API/S]
That was a surprise build in crude stocks compared with the 2.0-million-barrel withdrawal analysts forecast in a Reuters poll and was higher than the 0.6-million-barrel increase that market sources said the American Petroleum Institute trade group cited in its figures on Wednesday.
“This is a little bit of a bearish report with that crude build,” said John Kilduff, a partner at Again Capital.
The EIA and API reported inventory data a day later than usual due to the U.S. Labor Day holiday on Monday.
Eight members of the Organization of the Petroleum Exporting Countries and allies like Russia in OPEC+ will consider further increases to production in October at a meeting on Sunday, two sources familiar with the discussions told Reuters.
A potential OPEC+ production hike would send a strong signal that regaining market share takes priority over price support, said Tamas Varga, a senior analyst at PVM Oil Associates brokerage and consulting firm.
OPEC+ has already agreed to raise output targets by about 2.2 million barrels per day from April to September, in addition to a 300,000-bpd quota increase for the United Arab Emirates.
ECONOMIC DATA
In the world’s biggest economy, some shaky U.S. macroeconomic data that showed new applications for jobless benefits increased more than expected last week, supporting expectations the Federal Reserve would cut interest rates this month.
Investors have viewed the Fed’s September meeting as a lock for a quarter percentage point cut in what is now a 4.25% to 4.5% federal funds interest rate target range.
Central banks, like the Fed, use interest rates to control inflation. Lower rates reduce consumer borrowing costs and can boost economic growth and demand for oil.
Questions about Fed independence took center stage on Thursday as Trump’s economic advisor Stephen Miran testified at a Senate Banking Committee hearing on his nomination to the U.S. central bank’s seven-member governing board, with lawmakers from both parties pressing him for a commitment to be politically neutral.
In Germany, Europe’s biggest economy, leading economic institutes trimmed growth forecasts for 2025 and 2026, citing U.S. tariffs and delays to the boost from higher public spending in an export-reliant economy struggling to regain momentum.
U.S. President Donald Trump told European leaders on Thursday that Europe must stop purchasing Russian oil that he said is helping Moscow fund its war against Ukraine, a White House official said.
Any reduction in the amount of crude Russia may export could boost prices. Russia was the second biggest producer of crude in 2024 after the U.S.
Moscow, however, is not waiting for Europe to buy more oil. Russia’s largest oil producer Rosneft has secured an additional deal on supply of 2.5 million metric tons of oil per year to China via Kazakhstan, Interfax news agency quoted Russian Energy Minister Sergei Tsivilev as saying.
In Venezuela, an OPEC member sanctioned by the U.S., oil exports rose to a nine-month high of 900,000 bpd last month after U.S. oil major Chevron received a license that has allowed the country’s crude to return to the U.S. market.
(Reporting by Scott DiSavino in New York and Enes Tunagur in London; Additional reporting by Georgina McCartney in Houston, Ahmad Ghaddar in London, Sam Li in Beijing and Trixie Yap in Singapore; Editing by Ros Russell, David Gregorio and Nia Williams)
