Oil Prices Close Slightly Lower, Remain at 14-Month Lows

Oil prices remained near 14-month lows on Thursday, as concerns over demand in the U.S. and China, along with a potential increase in supply from Libya, outweighed a significant drawdown in U.S. inventories and OPEC+ announcing a delay in its planned production hike.

Brent crude futures dropped 1 cent, or 0.01%, to $72.69 per barrel, while U.S. West Texas Intermediate (WTI) crude fell 5 cents, or 0.07%, to $69.15 per barrel.

The U.S. Energy Information Administration (EIA) reported that energy companies withdrew 6.9 million barrels of crude from their inventories in the week ending August 30.

Talks between the Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Russia—known collectively as OPEC+—about postponing the planned production increases for October also helped support prices.

OPEC+ agreed to delay the scheduled oil production hike for October and November, stating that they could curb or reverse the increases if necessary.

In Libya, an OPEC member, some tankers were allowed to load crude from storage, despite production remaining restricted due to political disputes over the central bank and oil revenues.

Meanwhile, recent U.S. economic data provided some relief regarding the health of the economy, as the market looks for clues on the Federal Reserve’s path for interest rate cuts.

The Fed raised rates aggressively in 2022 and 2023 to curb surging inflation, but it is expected to lower borrowing costs at its September 17-18 policy meeting. Lower rates could stimulate economic growth and boost oil demand.