Oil Prices Settle Lower Amid OPEC+ Expectations

Oil prices settled lower on Friday, pressured by expectations for OPEC+ to boost output in October while demand outlook remains uncertain.

At 14:30 ET (18:30 GMT), West Texas Intermediate crude futures fell 3.3% to $73.45 a barrel, while Brent oil futures decreased by 2.5% to $76.83 a barrel.

Oil Prices in August Losses

U.S. oil prices dropped nearly 6% in August due to rising fears of a global economic slowdown affecting demand outlook. OPEC revised its global oil demand growth forecast for 2024, citing disappointing data from the first half of the year and lower anticipated demand from China.

Concerns about supply also influenced market sentiment, with worries that OPEC and its allies might proceed with plans to increase output in October.

Dollar Strength Adds to Oil Woes

A rebound in the dollar further pressured oil prices, as expectations for a larger cut in September were dampened by data showing that the Fed’s preferred inflation measure slowed unexpectedly in July alongside robust consumer spending.

Since oil is priced in dollars, a stronger dollar often makes oil costlier and less appealing to international buyers. Approximately 30% of traders now anticipate a 50 basis point rate cut in September, down from 37% the previous week, according to Investing.com’s Fed Rate Monitor Tool.

Iraq Production Cuts, Libya Shutdown Underpin Oil

However, oil prices found some support this week after reports indicated Iraq would reduce its oil production in September as part of an agreement with OPEC.

Iraq plans to decrease output to between 3.85 million and 3.9 million barrels per day, down from about 4.25 million bpd in July. Additionally, ongoing production disruptions in Libya have kept over half of the country’s oil output offline due to a leadership dispute within its central bank.

*(Peter Nurse, Ambar Warrick contributed to this article.)