Oil prices fell on Thursday after a report that OPEC+ was discussing increasing output for July, fueling concerns that global supply could outpace demand growth.
Brent crude futures fell 57 cents, or 0.88%, to $64.34 a barrel by 11:17 a.m. EDT (1517 GMT). U.S. West Texas Intermediate crude fell 53 cents, or 0.86%, to $61.04.
The Organization of the Petroleum Exporting Countries and its allies, known collectively as OPEC+, are discussing whether to make another major output increase at their meeting on June 1, Bloomberg News reported.
A 411,000-barrel-per-day increase for July is among the options being discussed, although no final agreement has been reached, the report said, citing delegates.
Reuters previously reported that the group plans to accelerate production increases and could increase by as much as 2.2 million barrels per day in November. OPEC+ has been in the process of ending production cuts, with output added to the market in May and June.
"We're seeing the market react to evidence that OPEC is abandoning its strategy of defending prices for market share," said Harry Tchiliguirian at Onyx Capital Group. "It's like ripping off a band-aid; you do it all at once."
RBC Capital analyst Helima Croft said in a note Wednesday that a 411,000-barrel-per-day increase from July was the "most likely outcome" of the meeting, particularly from Saudi Arabia.
"The key question is whether voluntary cuts will be fully phased out before the leaves turn brown in many parts of the world, in line with the original reduction schedule," she said.
Prices were already lower in the session after Energy Information Administration data released Wednesday showed U.S. crude and fuel inventories posted a surprise build last week as crude imports hit a six-week high and demand for gasoline and distillates declined.
Crude inventories rose by 1.3 million barrels to 443.2 million barrels in the week to May 16, the EIA said. Analysts polled by Reuters had expected a 1.3 million-barrel draw. The EIA's surprise build will put downward pressure on prices, especially WTI, said Emril Jamil at LSEG Oil Research, adding that it could further boost U.S. exports to Europe and Asia.
Meanwhile, U.S. oil licenses in Venezuela are set to expire on May 27, U.S. Secretary of State Marco Rubio said in a post on his personal X account late Wednesday. U.S. oil company Chevron's (CVX.N) license to operate in the country is set to expire next week. "Biden's pro-Maduro oil licenses in #Venezuela will expire as scheduled next Tuesday, May 27," Rubio wrote. (alg)
Source: Reuters
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