FILE PHOTO: OPEC logo is seen in this illustration taken, October 8, 2023. REUTERS/Dado Ruvic/File Photo

By Sam Li and Trixie Yap

(Reuters) -Oil prices declined by 1% on Thursday, extending the more than 2% decline of the previous session, as investors and traders looked ahead to a weekend meeting of OPEC+ where producers are expected to consider another increase in output targets.

Brent crude fell 62 cents, or 1%, to $66.96 a barrel by 0641 GMT, while U.S. West Texas Intermediate crude fell 64 cents, or 1%, to $63.33 a barrel.

Eight members of the Organization of the Petroleum Exporting Countries and allies - known together as OPEC+ - will consider further increases to production in October at a meeting on Sunday, two sources familiar with the discussions told Reuters, as the group seeks to regain market share.

"The market seems to be absorbing the supply increases relatively well during 3Q high season, but the test for oil prices will be potential inventory build-ups during the winter months," said Suvro Sarkar, DBS Bank energy sector team leader.

"We do not see too many positive drivers at this point, assuming geopolitical issues stay contained. Support for oil prices could diminish hereon," he added, expecting Brent prices to trade closer to $60-$65 per barrel in the near to medium term.

OPEC+ had already agreed to raise output targets by about 2.2 million barrels per day from April to September, in addition to a 300,000 bpd quota increase for the United Arab Emirates.

Over the past few months, despite the accelerating production increases, Middle Eastern oil prices have remained the strongest regional prices globally. This has bolstered the confidence of Saudi Arabia and other OPEC members to boost output, according to a Haitong Securities' report.

Weighing further on prices were some shaky U.S. macroeconomic data overnight that cast doubts on the strength of demand in the world's biggest oil consumer, some analysts said.

Weak price drivers for oil include "weak labour market conditions in the U.S.... most of the decline in July's job openings came from the acyclical parts of the job market, such as healthcare, which has been a major driver of job growth in 2025," said OANDA senior market analyst Kelvin Wong.

Markets are also awaiting government data on U.S. crude stockpiles due on Thursday, a day later than usual because of a U.S. holiday on Monday.

U.S. crude stocks rose by 622,000 barrels in the week ended August 29, market sources said, citing American Petroleum Institute (API) figures on Wednesday. [EIA/S] [API/S]

The API estimate for a U.S. build in crude stocks went against analysts polled by Reuters who estimated, on average, that U.S. crude inventories fell by 2 million barrels.

(Reporting by Sam Li in Beijing and Trixie Yap in Singapore; Additional reporting by Nicole Jao in New York; Editing by Tom Hogue, Christian Schmollinger and Muralikumar Anantharaman)