Oil started the month lower as concerns that a global slowdown would hurt energy demand eclipsed developments pointing to the rise, including a potential cut in OPEC+ supply and a significant drop in US crude inventories.
US crude oil (WTI) fell to $89 for the third consecutive month in August, as central banks, including the Fed, tightened their policies to combat high inflation. This was the longest series of declines since April 2020.
Oil tumbled more than 20 percent in the three months to August as the Fed and other central banks raised interest rates, fueling recession concerns. This drop has caused crude to give back all its gains since Russia's invasion of Ukraine at the end of February, prompting Saudi Arabia to show signs that OPEC+ countries could reduce supply.
OPEC+ will meet on September 5
The energy ministers of the 23-nation OPEC+ coalition will meet on September 5 to decide on production policy, after accepting a small supply increase at their last meeting. Ahead of next week's event, the group's Joint Technical Committee had tightened its outlook on global oil markets for this year and next.
Among the issues that OPEC+ ministers could consider is a US-led plan to limit the price of Russian crude oil in order to deprive Russia of energy revenues with the war in Ukraine. The proposal is garnering support as it signals the UK government's approval. G-7 Finance Ministers, including Treasury Secretary Janet Yellen, will discuss the plan on Friday.
On the other hand, the OPEC+ coalition tightened its outlook for global markets.
U.S. crude for October delivery fell 0.4 percent to $89.18 a barrel on Nymex.
Brent oil for November delivery fell 0.5 percent to $95.14 a barrel on the ICE Futures Europe Exchange.
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