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Oil prices inched up in early trade on Thursday, clawing back some of the previous session’s big losses after an OPEC+ panel maintained oil output cuts to keep supply tight amid concern about a looming slump in global economic growth.
Brent crude oil futures were up 11 cents to $85.92 a barrel while US West Texas Intermediate crude (WTI) rose 7 cents to $84.29 at 0040 GMT.
Oil prices witnessed its biggest one-day drop in over a year. Oil prices settled down more than $5 on Wednesday as a bleaker macroeconomic outlook and fuel demand destruction came into focus, following a meeting of an OPEC+ panel, grouping the Organization of the Petroleum Exporting Countries and allies led by Russia.
The OPEC+ ministerial panel made no changes to the group’s oil output policy, and Saudi Arabia said it would continue with a voluntary cut of 1 million barrels per day (bpd) until the end of 2023, while Russia would keep a 300,000 bpd voluntary export curb until the end of December.
“We continue to see the market in deficit through the fourth quarter and the softer prices reduce the probability OPEC will ease supply constraints,” National Australia Bank analysts said in a note.
On the downside, the euro zone economy probably shrank last quarter, according to a survey which showed demand fell in September at the fastest pace in almost three years as consumers reined in spending amid rising borrowing costs and prices.
The US services sector also slowed in September as new orders fell to a nine-month low, but the pace remained consistent with expectations for solid economic growth in the third quarter.
“Fuel prices may be closer to consumers’ pain threshold than inflation-adjusted prices might suggest,” JP Morgan said in a note, expecting the oil price to fall to $86 per barrel by year-end from this year’s peak of $97 per barrel hit in September.