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Oil Down, but Persistent Supply Concerns Cap Losses

Published 06-10-2021, 09:44 am
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By Gina Lee

Investing.com – Oil was down Wednesday morning in Asia. However, WTI futures were at their highest level since 2014, as a global energy crunch continues to tighten the crude, natural gas, and coal markets.

Brent futures also capped losses concern over supply remains, while the black liquid additionally digested a decision from the Organization of the Petroleum Exporting Countries and allies (OPEC+) to stick with its planned output increase.

Brent oil futures was down 0.25% to $82.50 by 12:03 PM ET (4:03 AM GMT) and WTI futures inched down 0.13% to $78.83.

The cartel’s decision, announced on Monday, said that OPEC+ would adhere to its July pact to boost output by 400,000 barrels per day (bpd) each month until at least April 2022, without increasing the figure.

"Crude oil extended gains as investors fret about tightness in the market as the energy crisis hikes demand," ANZ said in a note.

"The OPEC+ increase was well below what the market was expecting, considering the energy crunch across the globe. Not surprisingly, there is speculation that OPEC will be forced to move before the next scheduled meeting if demand continues to surge,” the note added.

The OPEC joint technical committee in September said that it expected a 1.1 million bpd supply deficit in 2021, which could increase into a 1.4 million bpd surplus in 2022.

Meanwhile, U.S. crude oil supply data showed signs of slowing fuel demand in the second-largest oil importer globally.

The data from the American Petroleum Institute (API), released on Tuesday, showed a build of 951,000 barrels for the week ending Oct. 1. Forecasts prepared by Investing.com had predicted a draw of 300,000 barrels, while a 4.127-million-barrel build was recorded during the previous week.

Investors now await crude oil supply data from the U.S. Energy Information Administration, due later in the day.

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