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Oil Prices Fall as OPEC+ Looks to Boost Production in October

by Krystal

OPEC+ is expected to start easing its production cuts in October, according to six sources within the group who spoke to Reuters on Friday.

If OPEC+ moves forward with increasing production next month, the impact will likely be balanced by significant production losses from Libya, which began this week. The news led to a sharp drop in Brent crude prices, which fell by over 1.5% during midday trading, though losses had begun to lessen by the time of writing.

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Libya has seen its oil production fall by 700,000 barrels per day (bpd) due to the shutdown of oilfields by Libya’s eastern government. This action is a response to escalating political conflicts between rival groups in Libya. The loss in Libyan output allows OPEC+ to gradually increase production from other member countries without significantly changing the total supply on the market.

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In October, eight OPEC+ members plan to raise their crude oil output by 180,000 bpd as part of the group’s strategy to unwind the 2.2 million bpd of voluntary cuts. However, OPEC+ has indicated that this plan is contingent upon maintaining a balance in the oil markets.

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Additionally, sources have suggested that the group hopes the U.S. Federal Reserve will lower interest rates in mid-September.

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On the trading front, both WTI and Brent crude prices fell. WTI was priced at $73.92 per barrel, down $1.99 (-2.62%), while Brent crude was at $78.81 per barrel, a decline of $1.13 (-1.41%).

Before the Libyan production issues, it was widely believed that OPEC+ would struggle to reverse its production cuts, especially with non-member countries like the United States and Brazil continuing to increase their output.

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