The price of crude oil plunged on the first trading session of the week as China released gasoline and diesel reserves, easing concerns over a tight supply, while investors cashed in ahead of the November 4 meeting of major crude producers that could raise production targets.
After gaining modestly on Friday, Brent crude futures fell 0.4% to $83.43 a barrel.
WTI crude futures fell by 0.5%, to $83 a barrel, after rising 76 cents on Friday.
In a rare official statement, China said it released reserves of the two fuels to support price stability in some regions and increase market supply.
“China’s sales were the result of releasing fuel reserves, which reflected Beijing’s intention to stabilize oil prices as it did with coal prices.
The Organization of the Petroleum Exporting Countries (OPEC), Russia, and their allies will meet on Nov. 4 in Vienna, and analysts expect them to stick to their plan to increase supply by 400,000 barrels a day in December.
The U.S. Commodity Futures Trading Commission (CFTC) said on Friday that money managers cut their net long positions in U.S. crude futures and options in the week to Oct. 26.
OPEC+ decided not to raise its planned output increase on global supply issues last week, helping to boost oil prices to multi-year highs.
As part of a broad campaign to pressure OPEC+ to increase oil production, President Biden urged G20 energy producers with spare capacity on Saturday to boost production.
Iraq’s government-owned oil marketing company, SOMO, said on Saturday that Iraq does not see the need to increase its production capacity beyond what has already been planned for OPEC members.
OPEC+’s decision Thursday will likely prompt investors to resume buying. Several market analysts expect oil prices to remain near $80 by the end of the year, due to tight supply and higher gas bills encouraging more power plants to use crude as a fuel source.
According to Baker Hughes Co., U.S. energy firms added oil and natural gas rigs for a 15th straight month in October, taking them to their highest level since April 2020.
After cutting crews and output in the region last year, Exxon and Chevron are looking to add drilling rigs to the Permian shale basin, the companies said Friday.