Oil prices drop as OPEC+ weighs another output hike.

Omodele Adigun

Oil prices fell by about 2% on Wednesday ahead of a weekend meeting of OPEC+ producers that is expected to consider another increase in production targets in October.

Brent crude fell $1.16, or 1.7%, to $67.98 a barrel by 1030 GMT. U.S. West Texas Intermediate crude fell $1.28, or 2%, to $64.31 a barrel.

Eight members of the Organization of the Petroleum Exporting Countries and allies (OPEC+) will consider further raising oil production at a meeting on Sunday, two sources familiar with the discussions told Reuters, as the group seeks to regain market share.

Another boost would mean that OPEC+, which pumps about half of the world’s oil, would be starting to unwind a second layer of output cuts of about 1.65 million barrels per day, or 1.6% of world demand, more than a year ahead of schedule.

The group had already agreed to raise output targets by about 2.2 million bpd from April to September, in addition to a 300,000 bpd quota increase for the UAE.

Actual increases from the group, however, have fallen short of those pledges as some members compensated for previous over-production and others struggled to raise output due to capacity constraints.

The benchmarks settled up more than 1% in the previous session after the U.S. imposed new sanctions on a network of shipping companies and vessels led by an Iraqi-Kittitian businessman for smuggling Iranian oil disguised as Iraqi oil.

Meanwhile, U.S. crude oil stockpiles were expected to have fallen last week, along with distillate and gasoline inventories, a preliminary Reuters poll showed on Tuesday.

Three analysts polled by Reuters ahead of weekly inventory data estimated on average that crude inventories fell by about 3.4 million barrels in the week to August 29.

But soft economic data kept prices capped. U.S. manufacturing contracted for a sixth month as President Donald Trump’s tariffs hit business confidence and economic activity, weighing on the demand outlook for oil. (Reuters)