DTN Oil Update
Oil Faces Monthly, Quarterly Losses as OPEC Hike Looms
VIENNA (DTN) -- Oil prices extended their decline Tuesday morning, heading toward a second straight monthly and quarterly loss, after reports emerged that delegates from the Organization of Petroleum Exporting Countries were mulling another production quota increase for November.
The return of more than 200,000 barrels per day (bpd) of northern Iraqi supply to the export market after a 2 1/2-year suspension also kept the market on tenterhooks.
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Representatives may also discuss stepping up the pace of output hikes at their next meeting on Sunday.
In crude oil, NYMEX-traded WTI for November delivery fell $1.11 to $62.34 barrel (bbl). For the month, WTI was headed for a 2.5% loss, extending August's near 8% loss. For the second quarter, it faced a 3% loss.
ICE Brent for November delivery retreated $0.97 to $67.00 bbl.
Among oil products, October RBOB gasoline futures slid $0.0292 to $1.9659 gallon, and the front-month ULSD contract fell $0.0357 to $2.3209 gallon.
The U.S. Dollar Index was at 97.82, down 0.013 points against a basket of foreign currencies.
Supply additions from non-OPEC members alone are likely to outpace global demand growth this year and next. The speed with which OPEC+ has returned barrels to the market so far this year already had analysts expecting growing global oil inventories in the fourth quarter and throughout next year. Further supply additions by the producer group will only exacerbate oversupply risks.
On Tuesday, oil prices deepened their decline after reports emerged that OPEC may discuss ramping up monthly production quotas by up to 500,000 bpd over the next three months.
Given OPEC's waning spare production capacity over the past six months, actual supply increases are likely to miss their lofty targets.
However, with the restart of the Kirkuk-Ceyhan pipeline last week, Iraq has already returned some 200,000 bpd of additional crude oil production to the market.