Oil Prices Decline Amid Weak Demand Signals
Oil prices continued to decline on Monday, with Brent crude futures down 56 cents to $76.37 a barrel and West Texas Intermediate (WTI) crude futures down 45 cents to $73.10 a barrel. This downward trend is fueled by expectations that OPEC+ will increase oil production starting in October, coupled with signs of weak demand from major consumers like China and the United States. The recent losses follow a 0.3% decline in Brent crude and a 1.7% decline in WTI last week, highlighting ongoing concerns about future consumption growth.
OPEC+ Production Increase and Economic Concerns
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, are reportedly moving forward with a planned increase in oil production by 180,000 barrels per day starting in October. This decision is part of a broader strategy to gradually unwind a total of 2.2 million barrels per day in production cuts while maintaining further reductions through the end of 2025. Market analysts suggest that the decision to increase production will depend heavily on oil prices, particularly if WTI approaches the $80 mark. Meanwhile, economic indicators from China show a decline in manufacturing activity, contributing to the pessimism surrounding global oil demand.
- In Libya, oil production has resumed at a rate of up to 120,000 barrels per day, although exports remain suspended due to recent conflicts. This resumption aims to meet local needs following a significant disruption caused by armed faction disputes. Additionally, while the official survey indicated a drop in China's manufacturing activity to a six-month low, a private survey revealed signs of recovery among smaller, export-oriented firms, suggesting a complex and fluctuating economic landscape.
