Oil drops amid US call for output boost
Oil went down on Thursday in Asia after its two-day gain. The black liquid suffered a setback after the US, the top oil consumer globally, called for major producers to increase output. This bolstered supply concerns as economies ease COVID-19 restrictions.
Brent crude futures fell 0.2%, or 17 cents, to $71.27 a barrel by 0650 GMT, after its earlier rise to a session high of $71.69.
Meanwhile, US West Texas Intermediate (WTI) crude futures dropped 0.3%, or 23 cents, to $69.02, following its earlier climb to $69.51.
On Wednesday, US President Joe Biden’s administration appealed to the Organization of the Petroleum Exporting Countries and allies (OPEC+) to boost oil production to deal with rising gasoline prices that they view as a threat to global economic recovery.
The OPEC+ agreed in July to increase output each month by 400,000 barrels per day over the previous month, starting in August. This would continue until the rest of the record cuts of 10 million bpd, or about 10% of global demand, made in 2020 are phased out.
However, worries that the increase will not be enough to meet the US and Europe’s demand still remain.
In related news, the US crude stockpiles dropped modestly in the previous week, while gasoline inventories fell to their lowest levels since November.