Oil prices edged up after previously plunging to multi-month lows as major producers considered delaying an output increase planned for next month and US inventories fell, though the gains were limited by persistent demand concerns. Brent crude futures for November rose 35 cents, or 0.48 percent, to $73.05 a barrel after dropping 1.4 percent in the previous session to their lowest close since June 27. US West Texas Intermediate crude futures for October were up 35 cents, or 0.51 percent, to $69.55 after hitting the lowest settlement since December.

Pessimism in oil markets seemed to ease following robust American Petroleum Institute (API) data and discussions within OPEC+ regarding the potential delay of the output hike, leading to cautious optimism. OPEC+ is deliberating on delaying its oil output increase scheduled to start in October as prices have tanked, according to sources within the group.

Last week, OPEC+ planned to proceed with its 180,000 barrels-per-day output hike in October as part of a strategy to unwind recent cuts. However, the potential resolution of a dispute over Libyan exports and soft Chinese demand prompted reconsideration. Prices also found support after API data showed US crude oil fell by 7.431 million barrels last week, surpassing analyst expectations.

Further US macroeconomic data, set to be released later, is awaited, and short-term speculators may be hesitant to take on fresh bearish positions on WTI crude given oversold readings in momentum indicators. The persistent demand worries in China, the world's largest oil importer, capped gains. Recent data revealed manufacturing activity in China sank to a six-month low as factory gate prices tumbled and orders dwindled, further unsettling market confidence.

Meanwhile, the Organization of the Petroleum Exporting Countries and its allies contemplate delaying the planned production increase for October due to price drops. Prices fell as concerns over the global economy and particularly weak data from China—witnessing its lowest prices in nine months—added to the market's bearish sentiment.

Initially, the group had aimed to boost production by 180,000 barrels per day to unwind cuts of 2.2 million barrels, but market volatility and low demand perspectives led to discussions about delaying this increase. The Brent price was at $74.47 after the potential delay announcement but remained at its lowest since December. Market volatility in recent weeks was fueled by factional disputes in Libya resulting in substantial production losses.

For investors, the reduced inventory levels and fluctuating production schedules mark a period of uncertainty. In the US, stockpiles of commercial crude saw a significant drop, which supported prices yet was overshadowed by volatile external factors and continued weak demand outlook from key markets, notably China. Brent prices continued to face pressure with unexpected employment data from the US in August failing to boost market sentiment.

Amid these developments, OPEC+ deferred its decision again, highlighting the complexity of balancing price stability with production strategies. Market anticipation remains high as analysts and industry insiders await further updates to gauge OPEC+ strategies and their impact on global oil prices.