Oil headed for the biggest monthly loss since October as investors weighed the prospect of additional OPEC+ production and the restoration of crude output in the U.S. after Hurricane Ida.
West Texas Intermediate fell 0.8% in New York and is down about 7% this month. While Gulf of Mexico crude producers are expected to gradually resume service after Ida crashed ashore in Louisiana, local refineries may be slower to return.
The Organization of Petroleum Exporting Countries and its allies will meet on Wednesday to assess the global market and prospects for demand as the pandemic grinds on. With expectations that the delta variant’s hit to consumption will fade, the alliance is on course to restore another 400,000 barrels a day. OPEC+ has already restarted roughly 45% of the unprecedented volume shuttered when the pandemic erupted.
Oil has endured a turbulent August, rising and falling on alternate weeks, as investors reacted to the latest twists in the global health crisis and swings in the U.S. currency. The U.S. benchmark crude has slumped this month, even though there has been a steady draw in stockpiles, and some nations including key importer have managed to control their delta-variant outbreaks.
There are “some pre-OPEC+ jitters and the realization that Hurricane Ida has a short term negative impact on demand, while supply should not be impacted,” said Ole Hansen, head of commodities strategy at Saxo Bank A/S.
WTI for October delivery lost 55 cents to $68.66 a barrel by 10:13 a.m. in London.
Brent for October settlement fell 0.5% to $73.06 a barrel.
The November contract, which was the most active, fell to $71.82 a barrel.