NEW YORK/LONDON (FFN) – Oil prices fell sharply on Friday, August 30, following reports that the OPEC+ alliance of producers plans to increase output starting in October. Additionally, diminishing hopes that the U.S. Federal Reserve (Fed) will significantly cut interest rates in September added to the downward pressure on prices, according to reports from Reuters and RTTNews.
The October contract for North Sea Brent crude, which expired on Friday, dropped by $1.14 USD (1.43%), closing at $78.80 USD (€71.07 EUR) per barrel. Over the week, Brent declined by 0.3% and was down 2.4% for the month. The November Brent contract fell by $1.89 USD (2.40%) to $76.93 USD per barrel.
U.S. West Texas Intermediate (WTI) crude also saw a sharp decline, dropping $2.36 USD (3.11%) to close at $73.55 USD per barrel. WTI was down 1.7% for the week and 3.6% for the month.
Sources within the OPEC+ alliance indicated that the group is likely to increase oil production in October, balancing out the impact of weaker demand with the need to compensate for production shortfalls in Libya and other member states.
Investors also reacted to new data showing that consumer spending in the U.S. increased solidly in July, signaling that the world’s largest economy was in better shape at the start of the third quarter than previously thought. This development dampened hopes that the Fed would cut interest rates by half a percentage point in September.
| Oil | Price (USD/barrel) | Daily Change (%) | Weekly Change (%) | Monthly Change (%) |
|---|---|---|---|---|
| Brent (October) | $78.80 | -1.43% | -0.3% | -2.4% |
| Brent (November) | $76.93 | -2.40% | – | – |
| WTI (USA) | $73.55 | -3.11% | -1.7% | -3.6% |
Key Words: oil prices, OPEC+, Brent, WTI, Fed, consumer spending, interest rates
