Oil Prices Slide as OPEC Speculation and US Stockpile Build Weigh on Market

Highlights:

• West Texas Intermediate (WTI) crude fell nearly 1% to around US$62 a barrel at the time of writing, marking its third consecutive daily decline amid market volatility.
• Investor concerns grew over the possibility that OPEC+ may accelerate production hikes, despite the group previously signalling no immediate plans to increase output.
• US crude stockpiles rose by 1.79 million barrels last week, while petrol consumption dropped to a six-month low, raising fears of weakening demand.

Third Consecutive Daily Decline

Oil prices extended their losses after another volatile trading session, as investors assessed the possibility that the Organization of the Petroleum Exporting Countries and its allies (OPEC+) could accelerate production hikes despite swelling US stockpiles. West Texas Intermediate (WTI) crude slipped nearly 1% to trade around US$62 a barrel at the time of writing, marking its third straight daily decline. Traders believe that the OPEC+ alliance might consider raising output more aggressively when it meets this weekend, even though the group has previously stated it has no immediate plans to do so.

“Any added barrels to global supply will be taken as a major negative by traders,” said Dennis Kissler, senior vice president at BOK Financial, highlighting market fears that increased production could worsen the current price downtrend.

Rising US Stockpiles Add to Pressure

Market sentiment was further dampened by fresh data from the US Energy Information Administration (EIA) showing that US crude inventories climbed by 1.79 million barrels last week. Stockpiles of petrol and distillates also rose, amplifying concerns about oversupply.

Adding to the bearish outlook, US petrol consumption fell to a six-month low, signalling weakening demand in the near term. This drop in fuel usage pressured futures contracts further as traders braced for slower economic activity.

Traders Eye OPEC+ Meeting

With the OPEC+ meeting approaching, market participants are closely monitoring whether the group will maintain its output policy or respond to recent price volatility. The combination of potential production hikes and rising US inventories has created headwinds for crude, casting uncertainty over the short-term demand outlook. Analysts say this weekend’s meeting will be pivotal in determining whether oil prices can stabilise or face further declines.

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