Oil prices hovered near four-month lows on Wednesday, as the market digested plans by OPEC+ to increase supply later this year and higher U.S. crude and gasoline stockpiles.
Brent crude futures were up 26 cents, or 0.3%, at $77.78 a barrel, while U.S. West Texas Intermediate crude futures rose 24 cents, or 0.3%, to $73.49. Both contracts had fallen more than 1% the previous day, reaching their lowest settlement levels since early February.
The slide in prices followed news that OPEC+ would start unwinding some of its output cuts in the fourth quarter, despite recent signs of weakening demand growth. RBC Capital’s head of commodities research, Helima Croft, said the “abundant supply picture at present” was causing concern even among those not traditionally skeptical of OPEC.
However, Saudi Arabian energy minister Prince Abdulaziz bin Salman has indicated that OPEC+ would pause or reverse the supply increases if demand was not strong enough to absorb the additional barrels.
Prices were also affected by data showing that U.S. job openings fell more than expected in April, which could help the Federal Reserve’s fight against inflation and strengthen the case for cutting interest rates.
Meanwhile, U.S. crude stocks increased by more than 4 million barrels in the week ended May 31, according to sources citing American Petroleum Institute figures. Gasoline stocks also rose by over 4 million barrels, twice the build expected by analysts. Renewed inventory draws are needed to push oil prices higher, according to UBS analyst Giovanni Staunovo.