Oil prices saw a rebound on Wednesday after a prolonged decline, driven by reports that OPEC+ is contemplating postponing a planned output increase set for October. Brent crude futures rose by 45 cents (0.6%) to $74.20, while U.S. West Texas Intermediate (WTI) crude futures gained 55 cents (0.8%) to reach $70.89.
The recent sell-off had seen Brent crude prices drop approximately 11%, or about $9, hitting a low of $72.63 earlier in the day. On Tuesday, prices had already fallen over 4%. The downturn was exacerbated by disappointing economic data from the U.S. and China, raising concerns about weaker global oil demand.
Additionally, traders noted that a potential resolution to the ongoing dispute affecting Libyan oil exports could lead to increased crude supply, further complicating OPEC+’s position. The group is now wary of market volatility and is discussing the possibility of delaying output hikes.
Citi analysts warned that without OPEC+ extending current output cuts indefinitely, market confidence in maintaining oil prices around $70 per barrel could diminish. Recent data highlighted concerns about demand, particularly from China, where manufacturing activity fell to a six-month low in August. In the U.S., manufacturing data also indicated subdued activity.
Weekly inventory data from the U.S. has been delayed due to the Labor Day holiday, with reports from the American Petroleum Institute and the Energy Information Administration expected soon. Preliminary estimates suggest a decline in U.S. crude oil and gasoline stockpiles for the previous week.