NEW YORK Oil fell more than 1% on Thursday after Reuters reported OPEC+ needed to address daily oversupply of more than 2 million barrels, and the number of U.S. unemployment benefit claims rose unexpectedly, signalling a slow economic recovery.
Brent crude fell 63 cents, or 1.4%, to $44.74 a barrel by 11:40 a.m. ET (1540 GMT,) and West Texas Intermediate (WTI) for September delivery was down 48 cents, or 1.1%, at $42.45 a barrel ahead of expiry.
The more active October WTI contract was down 43 cents, or 1%, at $42.68 a barrel.
Oil prices have been rangebound since mid-June, with Brent trading from $40 to $46 per barrel and WTI between $37 and $43.
“The rebound in global economic activity which explained to some extent the firm oil price during May-June period has stalled … the macro environment for crude oil continues to show weakness,” said Georgi Slavov, head of global fundamental research at Marex Spectron.
The Organization of the Petroleum Exporting Countries and its allies, known an OPEC+, said on Wednesday the pace of the oil market recovery appeared to be slower than anticipated with growing risks of a prolonged second wave of the pandemic.
Prices came under renewed pressure after Reuters reported that some OPEC+ members would need to cut output by an extra 2.31 million barrels per day (bpd) to make up for recent oversupply.
However, crude exports from Saudi Arabia, the world’s largest oil exporter, extended a decline in June to the lowest on record, official data showed.
Global markets also turned sour as the number of new U.S. claims for unemployment benefits rose back above 1 million last week.
Wall Street also came under pressure after minutes from the Fed’s latest policy meeting showed the labor market’s swift rebound in May and June had likely slowed and that policymakers would stick with aggressive stimulus measures for a much longer period.
“While oil-market fundamentals may have started to normalise, much of the progress comes from the supply side, while demand continues to disappoint,” said Emily Ashford, energy analyst at Standard Chartered Bank.
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