Oil prices fall as fears ease that OPEC + production cuts soon

Oil prices fell on Wednesday, after rising nearly 4 percent the previous day, due to easing fears that the Organization of the Petroleum Exporting Countries (OPEC) and its allies, in the OPEC+ grouping, will soon cut production.

Global benchmark Brent crude futures fell 40 cents, or 0.4 percent, to $99.82 a barrel by 0337 GMT, after rising 3.9 percent on Tuesday. US West Texas Intermediate crude futures also fell 27 cents, or 0.29 percent, at $93.47 a barrel, after jumping 3.7 percent the previous day.

Both contracts rose on Tuesday after Saudi Arabia, the de facto leader of OPEC, indicated that OPEC+ could make production cuts to balance the market.

But nine OPEC sources told Reuters on Tuesday that potential OPEC+ production cuts may not be imminent, and are likely to coincide with Iran’s return to the oil markets if it reaches a nuclear deal with the West.

A senior US official told Reuters on Monday that Iran had given up some of its key demands to revive the deal.

Gas prices in the United States jumped above $10 for the first time in nearly 14 years due to higher prices in Europe, where supplies remain tight.

Underlining the supply shortfall, US crude stocks fell by about 5.6 million barrels in the week ending August 19, according to market sources, citing American Petroleum Institute figures on Tuesday, versus analysts’ estimates of a 900,000-barrel drop in a Reuters poll.

But gasoline stocks rose by 268,000 barrels, while distillate stocks rose by 1.1 million barrels.

Oil rose in 2022, approaching an all-time high of $147 in March after the Russian invasion of Ukraine, raising supply concerns.

Since then, fears of a global recession, rising inflation and weak demand have weighed on prices.