The price of oil has stabilized as traders compare the planned increase in production from OPEC+ next month against the lower production in Libya that is currently available.
Written by UNN with reference to Bloomberg.
Brent for September is trading at around $77 a barrel after losing more than 2% on Friday. West Texas Intermediate held below $74. OPEC+ should add 180,000 barrels a day as they gradually resume production, which has been suspended since 2022, according to delegates who participated in the discussions.
Over the weekend, Chinese data showed that industrial activity contracted for a fourth month in August and the housing slump deepened, raising concerns that the world's largest crude oil importer may struggle to meet this year's economic growth target. Diesel sales in India also fell sharply last month.
Oil has lost much of its gains this year as expectations of ample supply and signs of economic difficulties, including in the US, weighed on prices.
Volatility has increased in recent weeks, with oil futures experiencing their largest intraday swings in months.
OPEC+ has repeatedly stated that it can “suspend or cancel” the planned production increase if necessary, although the political crisis in Libya, which halved the country's production, could give the alliance room to increase the number of barrels.
The oil market continues to trade on concerns about the possible consequences for prices due to the combination of rising production in OPEC+ and weakening global economic growth
Recall
Oil ended the last week of August with a significant decline in the market.
Benchmark oil brands showed negative dynamics on Friday, August 30. In particular, crude oil prices declined as investors weighed expectations of an increase in OPEC+ supply starting in October.
In addition, the market is influenced by hopes for a significant interest rate cut in the US, which is forecast for September after data showing strong consumer spending, according to Reuters.