TOKYO (REUTERS) – Oil prices fell on Monday (Nov 1) after China said it released reserves of petrol and diesel to boost supply, while investors unwound long positions ahead of an Opec+ meeting on Nov 4.
China released reserves of the two fuels to increase market supply and support price stability in some regions, the National Food and Strategic Reserves Administration said on Sunday.
Brent crude futures dropped 20 US cents, or 0.2 per cent, to US$83.52 a barrel by 0039 GMT, after gaining six US cents on Friday.
US West Texas Intermediate (WTI) crude futures slid 37 US cents, or 0.4 per cent, to US$83.20 a barrel, having risen 76 US cents on Friday.
Both benchmarks fell slightly last week, marking the first weekly drop in eight weeks for Brent and the first decline in 10 weeks for WTI.
“Investors are adjusting positions after the news of China’s release of fuel reserves and ahead of the Opec+ meeting,” said Nissan Securities general manager of research Hiroyuki Kikukawa.
All eyes are on the Thursday (Nov 4) meeting of the Organisation of the Petroleum Exporting Countries, Russia and their allies, together called Opec+, with analysts expecting them to stick to their plan to add 400,000 barrels per day of supply next month.
Oil prices rallied to multi-year highs last week, helped by the decision by Opec+ to maintain its planned output increase rather than raising it on global supply concerns.
“Still, some investors want to square their positions as there is a chance that Opec+ will decide a bigger increase in output,” Mr Kikukawa said, adding that investors will resume buying after confirming the Opec decision.
Money managers cut their net long United States crude futures and options positions in the week to Oct 26, the US Commodity Futures Trading Commission said on Friday.
US President Joe Biden on Saturday urged major Group of 20 energy producing countries with spare capacity to boost production to ensure a stronger global economic recovery as part of a broad effort to pressure Opec and its partners to increase oil supply.
But Iraq’s state oil marketing company, Somo, said on Saturday that Iraq sees no need to take any decision to increase its production capabilities beyond what has already been planned for Opec countries.
Spurred by rising oil prices, US energy firms added oil and natural gas rigs for a 15th month in a row last month, taking them to the highest since April last year, energy services firm Baker Hughes said on Friday.
Exxon and Chevron are looking to add drilling rigs in the Permian shale basin after sharply cutting crews and output in the region last year, the companies said on Friday. Chevron said it will add two drilling rigs and two completion crews this quarter.