Oil prices extended losses on Thursday as investors braced for more supplies following a compromise between top OPEC producers and as U.S. fuel stocks rose last week, raising concerns about demand at the world’s largest consumer.
U.S. West Texas Intermediate (WTI) crude for August was at $72.61 a barrel, down 61 cents, or 0.77%.
Brent crude futures for September dropped 66 cents, or 0.67%, to $73.87 a barrel.Both benchmarks slid 2% on Wednesday after Reuters reported that Saudi Arabia and the UAE reached a compromise that should pave the way to a deal to supply more crude to a tight oil market and cool soaring prices.
Talks among the Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, broke down earlier this month after the UAE objected to extending the supply cut deal beyond April 2022.
“The deal will take some time to get finalized, but it seems the UAE will be allowed to produce more output next year,” OANDA analyst Edward Moya said in a note.
“It seems OPEC+ will shortly have a plan to raise output and that is welcomed news as surging demand had oil market getting too tight.”
In the United States, crude stockpiles fell for the eighth straight week last week, but gasoline and diesel inventories rose despite a drop in refinery utilization rates, data from the Energy Information Administration showed on Wednesday.
The large drawdown in crude stocks did little to boost oil prices as traders focused on the first rise in total petroleum stocks since early June, Moya said.