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NEW YORK: Oil prices extended their slide on Wednesday on investor worries that the global economy would slow further with renewed restrictions to curb COVID-19 in China.
Brent crude futures for October, due to expire on Wednesday, were down $2.51 at $96.80 a barrel following Tuesday’s $5.78 loss. The more active November contract was down 62 cents to $97.22 a barrel.
US West Texas Intermediate crude futures were down 44 cents, or 0.5 percent, to $91.20 a barrel by 12:36 p.m. EST (1736 GMT), after sliding $5.37 in the previous session on recession fears.
Both contracts fell by more than 3 percent in earlier trade.
“The weakness coming out of China has played a significant role” in lowering prices, said Harry Altham, energy analyst for EMEA & Asia at StoneX Group in London. “There are fears of demand destruction across the West as interest rates rise and inflation concerns grip Western economies.”
OPEC+ sees surplus
The Joint Technical Committee of the Organization of the Petroleum Exporting Countries and allies, together called OPEC+, said it now sees an oil surplus this year of 900,000 barrels per day, up 100,000 bpd from its forecast a month earlier.
Some OPEC+ members have called for cuts. The group is next due to meet on Sept. 5 amid weakening demand in Asia that spurred Saudi Arabia to lower its official selling prices to that region. OPEC’s output rose to 29.6 million bpd in the most recent month, according to a Reuters survey Wednesday, while U.S. output rose to 11.82 million bpd in June, according to federal data. Both are highest levels since April 2020.
US crude production
US crude oil production rose in June by 1.7 percent to its highest since April 2020, according to a monthly report from the US Energy Information Administration on Wednesday.
Oil production rose to about 11.8 million barrels per day in June from about 11.6 million bpd the month prior, the report showed. Producers cut back drastically on output in 2020 after pandemic lockdowns slashed demand, and companies have been gradually boosting production.
Production in North Dakota rose 3.4 percent to about 1.1 million bpd in June, highest since March, the report showed.
New Mexico output rose 2 percent to 1.5 million barrels per day in June, highest on record. Output in Texas fell 0.1 percent to just under 5 million bpd in June, lowest since February.
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