Oil Falls On Supply Hike Talk

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Oil Falls On Supply Hike Talk

Oil Falls On Opec+ Supply Hike Talk

Oil prices are weak on reports that OPEC+ is thinking about bringing more supply to the market. Earlier, the OPEC+ had agreed to supply cuts in an effort to stabilize the oil prices.

But now, it seems that OPEC+ of thinking of hiking the supply once again. A natural reaction to this would be lower oil prices, and that's exactly what we are seeing in the market.

Opec+ To End Supply Cuts

The group is thinking of bringing it back around 1.66 million barrels/day into the market. This was initially a part of the voluntary supply cut, and now it seems to be coming to an end.

There are also additional reports that the group will bring back a 500,000 barrels/day supply into the market. If that happens, there will be surplus oil in the market for Q4 2025 and even in 2026.

Meanwhile, the data from the API was supportive of the oil market. But the data was not so good for the refined oil products.

The crude oil inventories in the USA have declined by 3.7 million barrels, while the crude stocks are down by 693,000 barrels.

However, an increase of 1.3 million barrels was registered in gasoline inventories. Similarly, an increase of 3 million barrels worth of distillate inventories was also reported.

And while we discuss the oil market, we should also look at what's happening with Russia! They are now struggling to export their refined oil products, which means they will have to sell more crude oil in the market.

Also, the new US sanctions seem to be showing their effect now, as India has lowered its oil imports from Russia. In fact, even a decline was seen in the oil exports to China.

So, the overall situation of the oil market is very mixed right now, with a risk of weaker oil prices in the coming months.

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