Oil was down Tuesday morning in Asia, set for its biggest monthly loss since October 2020. The Organization of Petroleum Exporting Countries and allies (OPEC+) is expected to boost production further when it meets later in the week. U.S. Gulf Coast crude output is also slowly being restored after Hurricane Ida blew through the region during the weekend.
Brent oil futures were down 0.44% to $71.91 by 11:28 PM ET (3:28 AM GMT) and WTI futures fell 0.46% to $68.89.
OPEC+ will convene on Wednesday, where it is expected to boost supply by a further 400,000 barrels per day as the fuel demand outlook continues to improve.
In the Gulf of Mexico, although crude producers are expected to gradually resume service after Hurricane Ida, local refineries are expected to take longer.
Investors now await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.
It has been a roller-coaster month for the black liquid as investors reacted to global COVID-19 outbreaks involving the Delta variant and equal volatility in the dollar.
However, “the tide has turned in recent weeks, with the market a lot more comfortable that the recovery in demand has not been derailed by the COVID-19 Delta variant,” Australia & New Zealand Banking Group (OTC:ANZBY) Ltd. senior commodities strategist Daniel Hynes told Bloomberg.
“However, the market will be watching the OPEC+ meeting for any signs they are seeing demand is not rebounding as strongly as they expected,” he added.
OPEC+ has already restored around 45% of the volume shut down in spring 2020 as the COVID-19 pandemic spread. Under a plan launched by Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman, the cartel will return the remaining volume in monthly increments of 400,000 barrels a day until late 2022.