Traders Flip-Flop Again On OPEC Expectations, Oil Incurs More Losses

Meanwhile, Russia gears up for more crude exports to China: File Image/Pixabay

A surprise build in U.S. crude stockpiles, along with expectations that the Organization of the Petroleum Exporting Countries (OPEC) will unwind voluntary output cuts, caused another round of losses for oil on Thursday.

Brent settled down 65 cents at $66.95 per barrel, while West Texas Intermediate settled down 49 cents at $63.48.

The U.S. Energy Information Administration reported a 2.4 million barrel rise in crude stocks during the week ended Aug. 29, as refineries headed into maintenance season, compared to expectations for a 2 million barrel withdrawal.

But total motor gasoline figures were far more favourable and in line with earlier predictions: a decrease of 3.8 million barrels, after the week prior's 1.2-million barrel dip.

As for previous reports from unnamed sources that OPEC would consider further raising production in October to regain market share when the cartel meets on Sunday, Tamas Varga, a senior analyst at PVM Oil Associates, said a hike "would signal that regaining market share takes priority over price support."

In other oil news on Thursday, Russia's Rosneft reportedly signed a deal to supply additional pipeline volumes of crude to China via Kazakhstan; the country's news agency Interfax quoted  energy minister Sergei Tsivilev as saying the state-controlled firm, "signed an agreement with Chinese partners on an additional supply of 2.5 million tonnes of oil via Kazakhstan."

Crude flows from Russia to China via Kazakhstan stood at 10.2 million tons in 2024, equal to about 204,000 barrels per day (bpd).

Also on Thursday, CNOOC Limited announced that it has launched oil production at the Wenchang 16-2 Oilfield Development Project in the northern part of the South China Sea; the project will reach a plateau of around 11,200 barrels of oil equivalent per day (boepd) in 2027.