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Oil extends losses on worry over possible supply increase from OPEC

Published 03/01/2021, 08:54 PM
Updated 03/01/2021, 09:00 PM
© Reuters. Views of Total Grandpuits oil refinery

© Reuters. Views of Total Grandpuits oil refinery

By Yuka Obayashi

TOKYO (Reuters) - Oil prices fell more than 1% on Tuesday, extending losses that began last week, as investors unwound long positions on concern that OPEC may agree to increase global supply in a meeting this week and Chinese demand may be slipping.

Brent crude dropped 78 cents, or 1.2%, to $62.91 a barrel by 0138 GMT, after losing 1.1% the previous day. U.S. West Texas Intermediate (WTI) crude slid 74 cents, or 1.2%, to $59.90 a barrel, having lost 1.4% on Monday.

Investors are worried the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, will boost oil output, said Hiroyuki Kikukawa, general manager of research at Nissan (OTC:NSANY) Securities.

"Oil prices remained under pressure as investors were making position adjustments ahead of the OPEC meeting," he said.

The group meets on Thursday and could discuss allowing as much as 1.5 million barrels per day (bpd) of crude back into the market.

OPEC oil output fell in February as a voluntary cut by Saudi Arabia added to reductions agreed to under the previous OPEC+ pact, a Reuters survey found, ending a run of seven consecutive monthly increases.

Market sentiment was also dampened by weak manufacturing data out of China, Nissan Securities' Kikukawa said.

© Reuters. Views of Total Grandpuits oil refinery

China's factory activity growth slipped to a nine-month low in February, which may curtail Chinese crude demand and pressure oil prices.

Latest comments

economy is improving. Media wants to sensationalize news, stay long on UCO, buy on Dip, 6 months later you will be smiling all the way to the bank.
improving from covid base? Economy wasn't great at all before pandemic.
Nobody wants oil. It’s just up on artificial supply shortages and diplomacy. Long $DRIP
Please, oils is down like 90 cents, they are screaming from every tv, radio and every faucet that oil is down.  See Biden has nothing to do with high prices you pay! Oil went up like 20 dollars, 90 cents don't make a difference, OK?
They wont keep the cut forever so has to happen now would be better if they do it gradually n ofc they will.
Approach 50 this month
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