Oil prices fell nearly 1% on Thursday, extending losses as investors braced for more supplies following a compromise between top OPEC producers and as U.S. fuel stocks rose, raising concerns about demand in the world’s largest consumer.
Brent crude futures for September dropped 59 cents, or 0.8%, to $74.17 a barrel by 0409 GMT
U.S. West Texas Intermediate (WTI) crude for August was at $72.51 a barrel, down 62 cents, or 0.9%.
Both benchmarks slid more than 2% on Wednesday after Saudi Arabia and the UAE reached a compromise that should pave the way for a deal to supply more crude to a tight oil market and cool soaring prices.
“The market is not taking any chances. Prices are very overbought anyway so traders might want to take some money off the table before the deal is concrete,” Avtar Sandu, senior commodity trader at Phillips Futures in Singapore.
“The deal will take some time to get finalized, but it seems the UAE will be allowed to produce more output next year, It seems OPEC+ will shortly have a plan to raise output and that is welcomed news as surging demand had oil market getting too tight.” OANDA analyst Edward Moya.
In the United States, crude stockpiles fell for an eighth straight week last week, but gasoline and diesel inventories rose despite a drop in refinery utilization rates, data from the Energy Information Administration showed on Wednesday.
The large drawdown in crude stocks did little to boost oil prices as traders focused on the first rise in total petroleum stocks since early June, Moya said.
However, the world’s top crude importer China on Thursday reported record crude processing volumes at its refineries in June, easing some of the downward pressure on oil prices.
Elsewhere, the prospect of a quick return of Iranian supplies to global markets has been pushed back as negotiations over the revival of the 2015 nuclear deal will not resume until mid-August