On Friday, oil prices plummeted amid prospects of solid yield from Libya and OPEC+, despite China’s new stimulus having restricted losses.
In the Asian afternoon session, Brent futures for December contracts declined by -0.18% to $70.96 a barrel. West Texas Intermediate futures for November delivery slid by -0.12% to $67.58 per barrel.
According to reports, both benchmarks were anticipated to ease by -4.00% and -6.00% this week, respectively.
Meanwhile, analysts noted that traders across asset classes have buoyed following China’s bolder stimulus. However, crude markets seem focused on Libya and the Organization of Petroleum Exporting Countries (OPEC).
Furthermore, the latest OPEC+ decision to bolster output has only added to the decline, adding that the oil markets have been battered by sluggish demand over the last few months.
Uncertainty looms about whether the Chinese stimulus will shift into higher crude demand, but it might offer some support to the crude market.
Meanwhile, OPEC+ is reducing oil production by 5.86 million barrels per day (bpd), reversing 180,000 bpd of those cuts at year-end.
Reports revealed that the turnaround is due to Saudi Arabia’s decision to leave a $100.00 oil cost target and gain market share. This causes crude prices to ease by 3.00% in the last session.
OPEC+ Likely to Bolster Oil Production
According to reports, Stifel experts revealed that OPEC+ may increase oil yield despite the likelihood of lowering costs in the short term.
The company said the December output surge would depart from the organization’s recent pauses in raising production for the next two months.
Stifel added that Saudi Arabia is geared to sacrifice costs to revive market share, although it is not anticipated that it will disclose an all-out price war.
Furthermore, analysts emphasized that Riyadh’s output had eased by 10.00% of global supply from its highest of 11.00 million bpd in 2022 to over 9.00 million bpd in July 2024.
