Oil dropped suddenly after the US called on the OPEC+ alliance to revive production more quickly.
Futures tumbled as much as 1.8% in New York after National Security Adviser Jake Sullivan said current plans to boost output weren’t sufficient. The world’s largest oil-consuming nation has seen gasoline prices firmly above $3 a gallon in recent months, putting pressure on drivers who are back on the road as pandemic restrictions ease.
“We are engaging with relevant OPEC+ members on the importance of competitive markets in setting prices,” Sullivan said in a statement. “Competitive energy markets will ensure reliable and stable energy supplies, and OPEC+ must do more to support the recovery.”
The U.S. has urged OPEC+ in the past to increase supply, most recently in April when Energy Secretary Jennifer Granholm called her Saudi counterpart Prince Abdulaziz bin Salman to highlight the importance of “affordable energy.”
West Texas Intermediate for September delivery fell 1.1% to $67.54 a barrel on the New York Mercantile Exchange at 12:35 p.m. London time.
Brent for October settlement was down 1% at $69.92 on the ICE Futures Europe exchange, after gaining 2.3% on Tuesday.
The 23-nation OPEC+ alliance led by Saudi Arabia and Russia agreed in July to revive the rest of the production they halted during the pandemic in careful installments, of 400,000 barrels a day each month.
Oil prices have softened in the past few weeks as the delta variant prompts fresh lockdowns in China and other key fuel consumers in Asia. Still, many analysts expect global markets will soon tighten as demand begins to pick up again. OPEC’s own data show its planned monthly hikes will fill only a fraction of the supply deficit over the rest of this year.
WTI futures gained 2.7% on Tuesday, when the American Petroleum Institute reported motor fuel stockpiles fell by 1.11 million barrels last week, according to people familiar with the data. That would be the fourth weekly draw, the longest run of declines since September, if confirmed by official figures due later Wednesday.