Oil prices remain at 14-month lows

New YorkOil prices held near 14-month lows on Thursday as concerns about demand in the United States and China and a likely rise in supplies from Libya offset a sharp draw in U.S. inventories and an announcement by OPEC+ of a delay in an increase in its output.

The European benchmark Brent contract fell one cent to $72.69 a barrel and the American West Texas Intermediate (WTI) fell five cents to $69.15. On the other hand, the Mexican export mix bucked the trend and managed to add two cents, to close at $64.63 a barrel, according to the price published by Pemex. However, it also remained at its lowest level since mid-December 2023.

OPEC+ will extend its schedule of cuts to support prices

OPEC+ has agreed to postpone planned oil output increases for October and November, saying it could slow or reverse increases if necessary, it said in a statement released Thursday.

In June, OPEC+ announced it would increase production by 180,000 barrels per day each month starting in October. This would replace, over the course of a year, the volume of 2.2 million barrels of crude oil that was reduced by voluntary cuts.

OPEC+ is reacting to the fall in crude oil prices, which have reached their lowest level since December, and is seeking to support prices. But the announcement did not help the market, which remained in the red.

US reserves decline

Traders also remained muted by the U.S. crude oil commercial stockpiles report, which fell sharply last week. The U.S. Energy Information Administration said energy companies removed 6.9 million barrels (mb) of crude from their inventories in the week ended Aug. 30. The drop was smaller than the API estimate for a 7.4 mb decline.

In OPEC member Libya, some tankers have been allowed to load crude from storage, even though output remains restricted by the political standoff over the central bank and oil revenues.

Economic data released in the United States on Thursday offered some relief regarding the health of the economy to a market that was looking for clues about the path of interest rate cuts by the Federal Reserve.

The Fed has raised rates aggressively in 2022 and 2023 to stem a surge in inflation, but is expected to cut borrowing costs at its policy meeting on Sept. 17-18. Lower interest rates can boost economic growth and oil demand.