TOKYO – Oil prices fell Monday after China announced it released reserves of gasoline and diesel to increase supply, while investors ran long positions ahead of an OPEC + meeting on November 4th.
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China has 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 oil futures fell 20 cents, or 0.2%, to $ 83.52 a barrel by 0039 GMT after rising 6 cents on Friday.
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US crude oil futures West Texas Intermediate (WTI) fell 37 cents, or 0.4%, to $ 83.20 a barrel after rising 76 cents on Friday.
Both benchmarks fell slightly last week, marking the first weekly decline in eight weeks for Brent and the first decline in 10 weeks for WTI.
“Investors are adjusting their positions following news of China’s release of fuel reserves and ahead of the OPEC + meeting,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
All eyes are on the November 4th meeting of the Organization of Petroleum Exporting Countries, Russia and its allies, collectively called OPEC +, and analysts expect them to stick to their plan to add 400,000 barrels per delivery day in December.
Oil prices rose to multi-year highs last week, aided by OPEC + ‘s decision to maintain its planned production increase rather than hike it due to global supply concerns.
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“Even so, some investors want to balance their positions as there is a possibility that OPEC + will decide to increase production more,” said Kikukawa, adding that once the OPEC decision is confirmed, investors will buy again.
Money managers reduced their net long positions in US crude oil futures and options in the week ending October 26, the US Commodity Futures Trading Commission (CFTC) said Friday.
U.S. President Joe Biden on Saturday urged major G20 energy producing countries with spare capacity to ramp up production to ensure a stronger global economic recovery, as part of a broader effort to pressure OPEC and its partners to cut oil supplies raise.
But Iraq’s state-owned oil marketing company, SOMO, said Saturday that Iraq sees no need to take a decision to increase its production capacity beyond what is already planned for OPEC countries.
Spurred on by rising oil prices, US energy companies added oil and gas rigs for the 15th consecutive month in October, their highest level since April 2020, energy services company Baker Hughes Co announced on Friday.
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Exxon and Chevron plan to add oil rigs in the Permian Shale Basin after severely cutting crews and production in the area last year, the companies said on Friday. Chevron said it will add two rigs and two completion teams this quarter.
