After a recent increase of over 1% in the previous trading session, oil prices in Asia demonstrated a decline on Wednesday, September 3. The price of Brent crude oil dropped by 19 cents (0.3%), reaching $68.95 per barrel, while West Texas Intermediate fell by 16 cents (0.2%) to $65.43 per barrel.
This is reported by Finway
Impact of New Sanctions and OPEC+ Expectations
Despite the slight decrease, prices remain near a monthly high. The cause of these fluctuations is the new US sanctions imposed on a network of shipping companies and vessels involved in the illegal transportation of Iranian oil disguised as Iraqi oil. These restrictions could lead to a potential reduction in supplies to the global market, supporting prices for “black gold.”
“Oil futures continue to be supported by new sanctions, which signal the possibility of supply cuts in the future,” noted Priyanka Sachdeva, senior market analyst at Phillip Nova.
Market participants are also closely monitoring the upcoming meeting of the Organization of the Petroleum Exporting Countries (OPEC) and its partners, scheduled for September 7. Analysts predict that the group is unlikely to change current production levels in the near future.
Oil Inventories and Economic Factors
Another factor supporting prices is the reduction in inventories of crude oil, distillates, and gasoline in the US. According to preliminary estimates by analysts, oil inventories decreased by 3.4 million barrels at the end of August. This indicates stable demand for the commodity, despite some uncertainty in the market.
However, further price increases are being restrained by weak economic indicators. US production has been declining for six consecutive months. Tariffs imposed by President Donald Trump have significantly impacted business confidence and activity, negatively affecting the outlook for oil demand.