Oil closes lower, records 7% monthly loss; Brent below $97

Oil drilling rigs

Oil prices plunged today, Aug. 31, amid concerns about the slowdown in global oil demand as oversupply fears persist.

Brent crude futures for October delivery, which expires today, closed down 2.8% at $96.49 a barrel. The benchmark noted a monthly loss of 7.2%.

West Texas Intermediate (WTI) crude tumbled 2.3% to $89.55 – a monthly loss of 7.4%.

The US Energy Information Administration report revealed a decline in oil stocks by 3.3 million barrels in the week ended Aug. 26, compared to expectations that indicated a decline of 400,000 barrels. Gasoline stocks fell by 1.2 million barrels.

Separate data showed that US oil exports declined for the second week in a row, reaching 3.967 million barrels per day, while crude oil production averaged 12.100 million barrels per day last week.

Meanwhile, the OPEC+ Joint Technical Committee halved its forecast for the oil supply surplus this year to reach 400,000 barrels per day.

A Reuters survey revealed that OPEC production rose in August to 29.58 million barrels per day, the highest level since April 2020.

Oil prices were affected after the release of official data today indicating a contraction in factory activity in China during August, for the second month in a row.