Oil falls as OPEC+ decision on production takes center stage

Oil slipped before an OPEC+ meeting as traders wait to see whether the group will heed or snub a US call to boost crude supplies.

West Texas Intermediate fell toward US$93 a barrel after swinging between gains and losses. The Organization of Petroleum Exporting Countries and its allies including Russia convene virtually later Wednesday, and a Bloomberg survey of traders and analysts suggested the alliance led by Saudi Arabia was more likely to keep output steady in September than agree on an increase. Kazakhstan said on Wednesday that the group may have to raise output.

Oil sank to the lowest close in more than five months earlier this week, giving up the bulk of the gains seen since Moscow’s invasion of Ukraine. That drop came as investors fret about a global economic slowdown. When OPEC+ meets later today Brent crude prices will likely be below US$100, while timespreads that gauge market strength have weakened markedly, indicating that some of the strength in physical markets is easing.

“It seems unlikely OPEC+ will do anything when it meets later today,” said Callum Macpherson, head of commodities at Investec. “If it did decide to increase output in any form, this could come as quite a surprise and lead to Brent testing levels further under US$100 a barrel.”