Miniscule OPEC+ Increase
The Organization of the Petroleum Exporting Countries (OPEC) and allies, most notably Russia, agreed on Wednesday to increase output by a meagre 100,000 barrels/day - much less than previously. 
The group commonly referred to as OPEC+, has been increasing its output by around 0.4 million barrels/day a month for a year now and had accelerated its pace to 648,000 barrels/day for July and August . This ramp-up had been achieved by bringing forward the September adjustment and equally distributing it to the two aforementioned months.
The decision came not long after US President's July visit to the Middle East, including Saudi Arabia, the de facto leader of OPEC. President Biden has been trying to bring down energy costs, but was unable to get any hard commitment around output boost from Riyadh.
Two Views, One Takeaway
The expected addition of 100K bpd is significantly lower than the previous increases, especially the last two, however it is still an addition and OPEC+ did not have any announced plans for continuing with its output plan past August.
So there are probably two ways to view yesterday's decision, but there is one takeaway, which is that the increase is miniscule and will be difficult to alleviate supply fears. The market is extremely tight and under-supplied and many countries have been having trouble meeting their quotas.
Wednesday's 31st OPEC and non-OPEC Ministerial Meeting alluded to the fact, noting that "the severely limited availability of excess capacity necessitates utilizing it with great caution in response to severe supply disruptions".
The group has generally not shown any fervor to substantially increase its production to help lower oil prices after the rally from the war in Ukraine and Wednesday's decision was probably an effort to cater to President Biden's needs, but without risking it relations with Russia.
US Inventories & Demand Fears
US commercial crude oil inventories (excluding SPR) may have risen by a sizeable 4.5 million barrels last week, but at 426.6 million barrels, they are about 7% below the five-year average for this time of year, according to latest report by the Energy Information Administration. 
This underpins the tightness which pushes oil prices higher, but markets are also worried about the demand side, which works the other way around. The aggressive monetary tightening around the world, along with other known factors, have created fears over looming recession.
The US economy contracted for two straight quarters and we have seen a series of downgrades for global GDP from many institutions, which has helped cool-off expectations around the Fed. However, inflation remains its top priority and as long as it does not begin to subside, the central bank will have a hard time getting its foot off the pedal.
The commodity has entered its third straight losing month, slumping by around 8% in August at the time of writing, giving up more than half of its gains from the surge that started in late -2021 and culminated to the March 14-year highs.
Near-term bias is on the downside and USOil is in risk of breaching 86.55, although further weakness towards and below 78.23 has a higher degree of difficulty.
On the other hand, given supply issues and the OPEC+ unimpressive action, we can see recovery efforts to mid-96.00, although convincing above-100.00 moves are required for the negative bias to pause - something that may prove elusive in the near-term.
Senior Market Specialist
Nikos Tzabouras is a graduate of the Department of International & European Economic Studies at the Athens University of Economics and Business. He has a long time presence at FXCM, as he joined the company in 2011. He has served from multiple positions, but specializes in financial market analysis and commentary.
With his educational background in international relations, he emphasizes not only on Technical Analysis but also in Fundamental Analysis and Geopolitics – which have been having increasing impact on financial markets. He has longtime experience in market analysis and as a host of educational trading courses via online and in-person sessions and conferences.
Retrieved 04 Aug 2022 https://www.opec.org/opec_web/en/press_room/6984.htm
Retrieved 04 Aug 2022 https://www.opec.org/opec_web/en/press_room/6882.htm
Retrieved 03 Oct 2022 https://ir.eia.gov/wpsr/wpsrsummary.pdf