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Oil extends losses on worry over possible supply increase from OPEC

Oil extends losses on worry over possible supply increase from OPEC

The sun sets behind the chimneys of the Total Grandpuits oil refinery, southeast of Paris, France, March 1, 2021. REUTERS/Christian Hartmann

TOKYO: Oil prices fell more than 1per cent on Tuesday, extending losses that began last week, as investors unwound long positions on concern that OPEC may agree to increase global supply in a meeting this week and Chinese demand may be slipping.

Brent crude dropped 78 cents, or 1.2per cent, to US$62.91 a barrel by 0138 GMT, after losing 1.1per cent the previous day. U.S. West Texas Intermediate (WTI) crude slid 74 cents, or 1.2per cent, to US$59.90 a barrel, having lost 1.4per cent on Monday.

Investors are worried the Organization of the Petroleum Exporting Countries and its allies, a group known as OPEC+, will boost oil output, said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

"Oil prices remained under pressure as investors were making position adjustments ahead of the OPEC meeting," he said.

The group meets on Thursday and could discuss allowing as much as 1.5 million barrels per day (bpd) of crude back into the market.

OPEC oil output fell in February as a voluntary cut by Saudi Arabia added to reductions agreed to under the previous OPEC+ pact, a Reuters survey found, ending a run of seven consecutive monthly increases.

Market sentiment was also dampened by weak manufacturing data out of China, Nissan Securities' Kikukawa said.

China's factory activity growth slipped to a nine-month low in February, which may curtail Chinese crude demand and pressure oil prices.

(Reporting by Yuka Obayashi; Editing by Tom Hogue)

Source: Reuters

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