Last week, oil prices on global markets dropped by over 3 percent, ending a two-week streak of gains. This decline is attributed to anticipated increases in OPEC production by the end of the year, coupled with uncertainty among traders regarding significant demand growth.
In London, the price of a barrel fell by 3.5 percent to $71.89, while in the United States, it decreased by 5.2 percent to $68.18.
The price drop follows reports that Saudi Arabia plans to abandon its $100 per barrel target and increase production in December to expand its market share, according to SEEbiz.
Saudi officials have consistently denied that they are aiming for a specific price level. OPEC sources indicate that the production increase plan aligns with the group’s official policy. Earlier this summer, OPEC and its allies announced a production increase of 180,000 barrels per day starting in December.
Additionally, prices faced downward pressure from news that rival factions in Libya reached an agreement to resolve a dispute over the central bank and control of oil revenues. This agreement could pave the way for a normalization of oil exports.
Due to ongoing conflict, Libya’s oil exports dropped to just 400,000 barrels per day in September, significantly lower than the pre-conflict level of over one million barrels per day.
Despite recent monetary and fiscal stimulus measures introduced by Chinese authorities—the largest since the pandemic—oil prices did not rebound as supply is expected to rise.
You Might Be Interested In
- Why Is Petroleum Called Mineral Oil?
- Top 10 Best Oil Stocks to Day Trade for October 2024
- What Is WTI Crude Oil Used For?