Oil is headed for its biggest monthly loss in nearly a year as August comes to an end.
World prices for oil are set to record their biggest loss since October 2020 as investors weigh the prospect of additional OPEC+ production and the restoration of crude output in the U.S. after Hurricane Ida.
West Texas Intermediate oil fell 0.9% 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 to production.
Data in Asia continues to show the impact of the Delta variant outbreak in recent months. China’s service sector contracted, while manufacturing figures narrowly missed estimates. Japan’s oil demand in July was down about 8% from 2019 levels.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies will meet on Wednesday this week (September 1) to assess the global market and prospects for demand as the pandemic grinds on. The alliance forecasts a supply deficit this year, even as it continues to add production, though a surplus is expected to return in 2022.
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.
U.S. benchmark crude oil has slumped this month, even though there has been a steady draw in stockpiles, and some nations including key importer China have managed to control their COVID-19 outbreaks.
West Texas Intermediate crude oil for October delivery lost 59 cents to $68.62 U.S. a barrel in London trading. Brent crude oil for October settlement fell 0.7% to $72.92 a barrel in London.
