Crude oil prices have fallen for the fourth consecutive session since the beginning of the week, trading at their lowest levels in four months at the start of US trading today, Thursday, October 2, amid rising expectations of a further increase in OPEC production and disregard for the possibility of tightening sanctions on Russian crude. US crude (NYMEX) fell by approximately 0.97% to trade at $61.19 per barrel, its lowest level since May 30, while Brent crude traded at $64.76 per barrel, down approximately 0.90%.
The US Energy Information Administration report issued yesterday, Wednesday, showed a rise in inventories of 1.8 million barrels in the past week ending September 26, compared to expectations of a rise of 300,000 barrels. In detail, gasoline inventories rose by approximately 4.1 million barrels, while distillate inventories, which include heating oil and diesel, rose by approximately 600,000 barrels.
Crude oil prices have been affected since the beginning of the week after reports from three sources familiar with the talks revealed earlier this week that OPEC and its non-OPEC allies, led by Russia in the OPEC+ alliance, intend to approve a new production increase of up to 500,000 barrels per day starting in November at the organization’s meeting next Sunday, triple the increase recorded in October. This has raised concerns about a global oil supply glut and put pressure on crude prices.
Conversely, investors in crude oil markets are ignoring threats of further sanctions on Russian crude after G7 finance ministers announced on Wednesday that they would take steps to increase pressure on Russia by targeting buyers of Russian crude.