Oil drops after OPEC+ supply hike amplifies concerns over glut
(Bloomberg) — Oil fell after OPEC+ agreed to another bumper output increase, stoking concerns about global oversupply just as the US-led trade war may be exacting a toll on economic growth and energy consumption.
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Brent was 0.5% lower at $69.32 a barrel, while West Texas Intermediate fell below $67, after OPEC+ endorsed an additional 547,000 barrels-a-day of output from September, completing the revival of a voluntarily-halted supply tranche a year ahead of an initial timetable. Another layer — of about 1.66 million barrel-a-day of curbed output — may follow, although there's no clear signaling.
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Crude is coming off the back of a three-month winning run, although prices slumped last Friday as soft US jobs data raised concern the world's largest economy was slowing following the Trump administration's wave of levies. Still, traders are weighing the possibility Washington may also move later this week against Russian oil flows, including buyers, in a bid to raise the pressure against Moscow to pause the war in Ukraine.
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The September output increase announced by OPEC+ at the weekend was as expected, and stands to complete the reversal of a cutback made by an eight-member sub-group in the wider alliance, including Saudi Arabia and Russia, in 2023. The progressive restoration of supplies over recent months has been widely seen as a concerted push by the cartel to reclaim market share against rivals such as US shale drillers, as well as other non-cartel producers.
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