SINGAPORE (Reuters) – Oil prices continued to decline for the third consecutive day on Friday, as markets braced for higher output from Libya and the broader OPEC+ group. However, stimulus efforts from China, the world’s largest oil importer, helped limit further losses.
By 0433 GMT, Brent crude futures had dropped 20 cents, or 0.28%, to $71.40 per barrel. Meanwhile, U.S. West Texas Intermediate (WTI) crude futures decreased by 14 cents, or 0.21%, to $67.53. For the week, Brent was on course to lose 4%, while WTI was expected to fall by 6%.
Priyanka Sachdeva, a senior market analyst at Phillip Nova, noted that despite relief in broader financial markets following China’s recent stimulus measures, the oil market remained fixated on developments in Libya and OPEC.
“The decision by OPEC+ to increase production has added to the already bearish sentiment,” said Sachdeva. She pointed out that the oil market has faced weaker demand for several months.
“While it remains unclear if Chinese stimulus will drive higher fuel demand, it does offer some hope for the oil market,” Sachdeva added.
China’s central bank took action on Friday, cutting interest rates and injecting liquidity into the financial system as part of an effort to revive economic growth, which has been hindered by deflationary pressures. The Chinese government aims to reach its 5% growth target for this year.
Further fiscal measures are expected before the start of China’s national holidays on October 1. This follows a meeting of the country’s top Communist Party leaders, who expressed growing concern over economic challenges.
In Libya, rival factions vying for control of the country’s Central Bank reached an agreement on Thursday to resolve their differences. This conflict had significantly reduced oil production, with exports plummeting to 400,000 barrels per day (bpd) in recent weeks, down from over 1 million bpd last month.
Daniel Hynes, an analyst at ANZ Bank, suggested that the agreement could restore more than 500,000 bpd of Libyan oil to the market.
In addition, OPEC and its allies, collectively known as OPEC+, are currently reducing output by 5.86 million bpd. However, the group plans to reverse 180,000 bpd of those cuts in December.
A media report on Wednesday stated that Saudi Arabia, the de facto leader of OPEC+, is moving away from its previous $100-per-barrel oil price target in favor of expanding its market share. This news triggered a 3% drop in oil prices that same day.
Although Saudi Arabia has repeatedly denied targeting a specific price for oil, sources within OPEC+ told Reuters that the plan to increase production in December is not a significant shift from current policy.
“Overall, oil markets are clearly wary of the global supply-demand balance in 2025 and what role OPEC+ should play,” analysts at FGE Energy said in a note to clients on Thursday. They highlighted the cautious mood, which has been reflected in record low net positions on ICE Brent contracts held by managed money funds.
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