DTN Oil Update
Oil Prices Drop as OPEC+ Mulls Another Output Hike
VIENNA (DTN) -- Oil prices slumped Wednesday morning on reports that the Organization of Petroleum Exporting Countries and its partners will be considering another round of production hikes at a meeting on Sunday.
NYMEX-traded WTI for October delivery fell $1.58 to trade near $64.01 bbl, and ICE Brent for November delivery declined $1.48 to $67.66 bbl.
October RBOB gasoline futures dropped $0.0241 to $2.0187 gal, and the front-month ULSD contract was down $0.0120 to $2.3624 gal.
The U.S. Dollar Index softened by 0.297 points to 98.050.
Market observers had largely expected OPEC+ to pause output increases in October. The recent series of monthly supply hikes was part of the unwinding of some 2.2 million bpd in voluntary production cuts shouldered by eight member states, achieved by last month's quota increase. Further production quota hikes would therefore target separate, long-standing curtailments from the Declaration of Cooperation, colloquially known as OPEC+, months ahead of schedule.
The news added to concerns over a growing supply-demand imbalance. Most analysts had already expected the global oil market to be oversupplied by the end of the year amid lackluster demand growth and solid non-OPEC production increases. In recent months, OPEC not only stepped up the pace of output hikes on paper, but has month by month inched closer to fully realizing them in practice.
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