Oil prices decreased on Thursday over the decision by the Organization of the Petroleum Exporting Countries and allies (OPEC+) to follow the existing policy of incrementally increasing production through the end of the year.
International benchmark Brent crude was trading at $71.40 per barrel at 0725 GMT for a 0.26% decrease after closing Wednesday at $71.59 a barrel.
American benchmark West Texas Intermediate (WTI) traded at $68.38 a barrel at the same time for a 0.30% decline after ending the previous session at $68.59 per barrel.
At its 20th OPEC and non-OPEC Ministerial Meeting (ONOMM) via videoconference late Wednesday, OPEC+ agreed to stick to the existing production policy by approving an incremental increase of up to 400,000 barrels per day (bpd) each month up to the end of this year.
In the OPEC meeting in July, the group had agreed to raise output by 400,000 bpd from August to December and extend its production cut agreement from April 2022 to December 2022.
In addition to the OPEC+ decision to pump more oil into the market, prices also came under pressure from demand worries due to the rising coronavirus cases globally.
'While the effects of the COVID-19 pandemic continue to cast some uncertainty, market fundamentals have strengthened and OECD [Organization for Economic Co-operation and Development] stocks continue to fall as the recovery accelerates,' the group said in a statement.
Hurricane Ida, which forced producers on the northern US Gulf Coast to either completely close or partially evacuate many offshore platforms in the region at the beginning of the week, continues to pressure prices. Officials say it might take weeks for oil refineries to restart production while power and water shortages are ongoing in the region.
However, the more-than-expected drop in US crude oil inventories has curbed the downward price trend. According to the latest data released by the Energy Information Administration, US commercial crude oil inventories dropped 1.7% during the week ending August 27.
Inventories decreased by 7.2 million barrels to 425.4 million barrels compared to the market expectation of a 2.8 million barrel draw.
By Ebru Sengul Cevrioglu