Oil Steadies as Traders Count Down Final Hours to OPEC+ Meeting

Oil steadied as September opened, with traders counting down the hours until an OPEC+ meeting that should result in a further rise in output.

West Texas Intermediate was little changed after losing more than 7% in August, the biggest monthly decline this year. The Organization of Petroleum Exporting Countries and its allies including Russia are expected to ratify a plan to add 400,000 barrels a day in October, wagering that the market can absorb the extra flows as demand recovers from the coronavirus pandemic.

Traders were also assessing figures that pointed to a rise in crude inventories in Cushing, Oklahoma. The industry-funded American Petroleum Institute reported holdings at the key hub expanded by more than 2 million barrels last week, according to people familiar with the figures. Gasoline stockpiles also rose, although there was a draw in nationwide crude oil inventories.

After rallying in the first half, crudes surge stalled over the past two months amid concern about the spread of the delta variant and a rebound in the U.S. dollar. OPEC+ has been gradually restoring the supply it took offline last year as the pandemic broke out, crushing consumption. The alliance projects that global inventories will continue to drop this year even as it loosens the taps.

In the U.S., the restoration of supplies and refining continues in the Gulf of Mexico and Louisiana after the severe buffeting delivered by Hurricane Ida at the weekend. Port Fourchon, America‘s biggest base supporting the region’s offshore industry, appears to have largely withstood the storm.

Brent‘s prompt timespread was 62 cents a barrel in backwardation. While that’s a bullish pattern -- with near-dated prices trading above those further out -- it is down from 97 cents a week ago.

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