Oil Prices Seesaw on Supply Outlook, Storm Impacts

Oil prices ended Wednesday largely flat amid reports about growing Opec-plus supply, an increase in US crude oil output and inventories and the lingering impacts of Hurricane Ida. Traders seemed to struggle digesting the day’s news, although in the waning hours of the session global benchmarks ultimately managed to climb back from about $1 per barrel down, buoyed by a large weekly draw on US crude stocks. In London, the November contract for ICE Brent closed 4¢ down at $71.59 per barrel on Wednesday, while in New York, the October contract for West Texas Intermediate (WTI) eked out a 9¢ gain to finish the day at $68.59/bbl. Opec Influence Downward price pressure came from Opec-plus, which agreed on Wednesday to stick to its planned tapering of production restrictions in October (related). Markets, unnerved by the damage being wrought by the Covid-19 Delta variant, wanted a signal that the producers alliance might slow, or at least be willing to slow, the output hikes it planned between now and December. But Opec-plus decided to stick to the parameters of its Jul. 18 agreement, which calls for boosting output by 400,000 barrels per day per month in August-December, or a total of 2 million b/d by year’s end (IOD Jul.19'21). “While the effects of the Covid-19 pandemic continue to cast some uncertainty, market fundamentals have strengthened and OECD stocks continue to fall as the recovery accelerates,” Opec said in a statement. US Output Growth