Oil prices have decreased due to oversupply concerns after signs of increased production from the Organization of the Petroleum Exporting Countries (OPEC) for this month. The increased OPEC output led to September Brent crude futures falling 25 cents, or 0.3%, to $74.72 per barrel, while the October contract fell 0.3% to reach $75.35, Reuters reported.
US West Texas Intermediate crude futures (WTI) tumbled 24 cents, or 0.3%, to stand at $69.88 a barrel.
A survey conducted by the news agency revealed that OPEC output jumped 70,000 barrels per day (bpd) to 32.64 million bpd this month, which represents the highest production level for this year.
Brent futures are destined for their biggest monthly loss in two years, dropping around 6%, while WTI futures are expected to register a drop of 5.8% for this month, their biggest since October last year.
Increased OPEC output is in line with the group’s commitment to offset the loss of Iranian supply caused by looming US sanctions.
Meanwhile, US President Donald Trump said on 30 July that he would meet with his Iranian counterpart Hassan Rouhani without any preconditions.
The proposed meeting comes after Trump threatened on a social media platform last week to impose severe sanctions on the Middle Eastern nation.
The US asked other countries to reduce oil imports from Iran to zero from November this year.
Analysts indicated that there are bullish signs in the refined products market.
Energy Aspects oil analyst Virendra Chauhan was quoted as saying: “Products demand has started to improve and if products are strong, crude spreads, which are currently weak, will be dragged up.
“The crude market should not ignore the recent turn in products, especially as this pick-up in demand comes at a time when Iranian crude exports should start to fall.”