Oil prices have stabilised after a sharp two-day drop, but still remain on track for a significant weekly decline. This is due to the prospects of increasing supply from OPEC members Saudi Arabia and Libya, reports Komersant ukrainskyi
reports with reference to Bloomberg.
Thus, Brent crude oil is trading at around $72 per barrel and has fallen by about 4% over the week, while West Texas Intermediate (WTI) has fallen below $68.
According to the Financial Times on Thursday, Saudi Arabia confirmed its intention to increase production. Meanwhile, Libya’s warring factions have agreed to appoint a new central bank governor, paving the way for a resolution of a dispute that has led to a significant reduction in oil production in the country.
“The new agreement between Libya’s eastern and western administrations could bring more than 500,000 barrels per day back to the market in the short term. This is putting pressure on market sentiment,”
– said Han Jun Liang, investment strategist at Standard Chartered Plc in Singapore.
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Oil is headed for a second quarterly decline as OPEC’s plans to ease voluntary supply cuts, as well as the challenging economic outlook for China, the largest importer, weigh on futures. China announced a series of monetary and fiscal stimulus measures this week, which supported equities and some commodities, but their effectiveness remains uncertain.
Israel has vowed to indefinitely continue bombing Hezbollah targets in Lebanon, undermining efforts to reach a ceasefire agreement that could reduce the risk of a regional war.
Elsewhere, Hurricane Helene slammed into the west coast of Florida, bringing dangerous winds and threatening deadly flooding in several states. According to the US Bureau of Safety and Environmental Protection, as of Thursday, about a quarter of oil production in the Gulf of Mexico was shut down due to the storm.
Due to these circumstances, futures have experienced sharp fluctuations this week.