Oil prices fell further amid signals that OPEC plans to increase output starting in October and growing economic challenges in China.
Brent crude for November delivery dropped towards $76 per barrel, having already declined by more than 2% on Friday. West Texas Intermediate was trading around $73. OPEC is expected to boost production by 180,000 barrels per day as it gradually restores levels that were cut back since 2022, according to delegates involved in the talks.
Over the weekend, new data from China revealed that factory activity contracted for the fourth consecutive month in August. Additionally, the slump in the residential sector has worsened, raising concerns that China, the world’s largest crude importer, may struggle to achieve its economic growth target for the year.
Oil prices have retreated from most of their gains this year due to expectations of a surplus supply and various economic challenges, including in the US. Recent weeks have seen increased volatility, with crude futures experiencing some of their largest intraday swings in August.
OPEC has indicated that it might “pause or reverse” its planned output increases if needed. However, the political crisis in Libya, which has halved the country’s oil production, may have given the coalition the opportunity to increase output further.