Before the OPEC+ meeting, oil will record its biggest monthly decline this year | Business and Economic News

OPEC+ predicts there will be a supply shortage this year, although it continues to increase production, it is expected to have an oversupply by 2022.

As investors weigh the prospects of OPEC+ production increase and the recovery of US crude oil production after Hurricane Ida, oil prices will have their biggest monthly decline since October.

West Texas Intermediate crude oil fell 1.3% in New York and has fallen about 7% this month. Although crude oil producers in the Gulf of Mexico are expected to gradually resume service after the Ida crash in Louisiana, the recovery of local refineries may be slower.

At the same time, data from Asia continue to show the impact of delta mutation outbreaks in recent months. China’s service industry contracted, and manufacturing data was slightly lower than expected. According to Bloomberg’s calculation of government data, Japan’s oil demand in July fell by about 8% from 2019 levels.

As the pandemic spreads, the Organization of Petroleum Exporting Countries and its allies will meet on Wednesday to assess the outlook for global markets and demand. The alliance predicts that there will be a supply shortage this year. Although it continues to increase production, the surplus is expected to recover in 2022.

As investors reacted to the latest ups and downs of the global health crisis and the volatility of the U.S. dollar, oil went through a turbulent August, alternating up and down in a few weeks. Despite the steady decline in inventories, some countries, including major importer China, have managed to contain their delta mutation outbreak, but the US benchmark crude oil fell this month.

Ole Hansen, head of commodity strategy at Saxo Bank A/S, said, “There was some nervousness before OPEC+ and realized that Hurricane Ida had a short-term negative impact on demand, and supply should not be affected.”

price:

• As of 9:08 am New York time, the price of WTI crude oil for delivery in October fell by 91 cents to 68.30 US dollars per barrel.
• The October settlement price of Brent crude fell 0.8% to US$72.84 per barrel.
• The most active November contract fell to US$71.50 per barrel.

Energy companies affected by Ada began to resume operations. Colonial Pipeline Co. said it will restart the gasoline line 1 and diesel and jet fuel line 2 from Texas to North Carolina on Monday night.

Data on Tuesday showed that Beijing’s liquidity restrictions to curb the spread of delta variables appeared to have affected the growth rate. The official manufacturing purchasing managers’ index fell to 50.1 from 50.4 in July, slightly below the median of Bloomberg’s survey of economists.