Oil falls nearly 1% as market eyes increased supplies

Shafaq News / Oil prices fell nearly 1% on Thursday, extending losses as investors braced for more supplies following a compromise between top OPEC producers and as U.S. fuel stocks rose, raising concerns about demand in the world's largest consumer, Reuters reported.

Brent crude futures for September dropped 59 cents, or 0.8%, to $74.17 a barrel by 0409 GMT while U.S. West Texas Intermediate (WTI) crude for August was at $72.51 a barrel, down 62 cents, or 0.9%.

Both benchmarks slid more than 2% on Wednesday after Reuters reported that Saudi Arabia and the UAE reached a compromise that should pave the way for a deal to supply more crude to a tight oil market and cool soaring prices.

"The market is not taking any chances. Prices are very overbought anyway so traders might want to take some money off the table before the deal is concrete," said Avtar Sandu, senior commodity trader at Phillips Futures in Singapore.

Talks among the Organization of the Petroleum Exporting Countries and their allies including Russia, a group known as OPEC+, had broken down earlier this month after the UAE objected to extending the supply cut deal beyond April 2022.

"The deal will take some time to get finalized, but it seems the UAE will be allowed to produce more output next year," OANDA analyst Edward Moya said in a note.

"It seems OPEC+ will shortly have a plan to raise output and that is welcomed news as surging demand had oil market getting too tight."

In the United States, crude stockpiles fell for an eighth straight week last week, but gasoline and diesel inventories rose despite a drop in refinery utilization rates, data from the Energy Information Administration showed on Wednesday.

The large drawdown in crude stocks did little to boost oil prices as traders focused on the first rise in total petroleum stocks since early June, Moya said.

However, the world's top crude importer China on Thursday reported record crude processing volumes at its refineries in June, easing some of the downward pressure on oil prices.

Elsewhere, the prospect of a quick return of Iranian supplies to global markets has been pushed back as negotiations over the revival of the 2015 nuclear deal will not resume until mid-August.