Oil continued to trade lower in Asia trading on Thursday morning, following a weak finish in the previous session on the back of demand concerns as China announced fresh restrictions to limit COVID-19.
West Texas Intermediate futures were trading 0.5% down at $89.09/barrel at press time.
Small Surplus: The oil market will see a small surplus of just 0.4 million barrels per day in 2022, lower than the earlier forecast, due to the underproduction of its members, reported Reuters, citing OPEC+ sources. The news comes ahead of an OPEC+ policy meeting scheduled for Sept. 5.
Last week, Saudi Energy Minister Prince Abdulaziz bin Salman said OPEC+ is ready to reduce output amid volatility in the oil futures market, driven by thin liquidity and a disconnect with physical markets.
U.S. Stockpiles: U.S. crude stocks dropped by 3.3 million barrels to 418.3 million barrels according to the U.S. Energy Information Administration.
Expert Take: Mike Sabo, market strategist at RJO Futures in Chicago, told Reuters the fear that “there’s a slowdown here” and also the potential for some additional supply increases “coming down the pike” is having some pressure on the market.