Futures on US West Texas Intermediate Crude Oil hovered just above a fresh 23-week low on Thursday following an unexpected increase in US crude oil and gasoline stocks last week.
The official report by the US Energy Information Administration (EIA) showed on Wednesday crude oil inventories had increased by 4.467 million barrels during the week ended July 29th – the biggest increase since late June. Analysts on average had anticipated a drop by 0.629 million barrels.
US gasoline inventories also surged last week, by 0.163 million barrels, while confounding the median analyst estimate of a 1.614 million barrel drop, implying weak demand.
Meanwhile, OPEC+ members agreed to increase their oil production target by 100,000 barrels per day, which equals 0.10% of global oil demand.
Previously, OPEC+ has been increasing production by about 430,000-650,000 barrels per day every month, but the group has struggled to meet full targets, as most major producers have already exhausted their output potential after years of under-investment in new capacity.
Prior to the meeting, OPEC+ had revised down its oil market surplus forecast for 2022 by 200,000 barrels per day to 800,000 barrels per day.
“It looks like OPEC+ is resisting calls to boost output because the crude demand outlook continues to get slashed. The world is battling the ongoing global energy crisis and it won’t be getting any help from OPEC+,” Edward Moya, senior analyst at OANDA, wrote in an investor note, cited by Reuters.
“The oil market will remain tight over the short term and that means we should still have limited downside here. Crude prices should find strong support around the $90 level and eventually will rebound towards the $100 barrel level even as the global economic slowdown accelerates.”
As of 7:27 GMT on Thursday WTI Crude Oil Futures were losing 0.62% to trade at $90.35 per barrel. Earlier in the trading session the black liquid went down as low as $90.19 per barrel, which has been its weakest price level since February 25th ($90.05 per barrel).
At the same time, Brent Oil Futures were losing 0.83% on the day to trade at $96.31 per barrel. Earlier in the trading session Brent Oil went down as low as $96.23 per barrel, which has been its weakest price level since July 14th ($94.48 per barrel).