Oil falls in price: prospects for additional supplies offset concerns about the Middle East
Kyiv • UNN
Brent and WTI futures fell by 0.7-0.8% due to a better supply outlook and weak demand growth. The escalation of the conflict in the Middle East and the possible resumption of production in Libya also affected the market.
Oil prices declined on Tuesday as a better supply outlook and sluggish global demand growth outweighed concerns about the escalating conflict in the Middle East and its impact on crude oil exports from the region, UNN reports citing Reuters.
Details
Futures for Brent crude for December delivery fell 49 cents, or 0.7%, to $71.21 per barrel by 14:17 Kyiv time. Futures for WTI crude oil lost 55 cents, or 0.8%, to $67.62.
Earlier in the session, Brent crude fell by 2.5% and WTI crude fell by 2.7% before recovering its losses.
A group of leading ministers from the OPEC+ group of producers will meet on October 2 to review the market, with no policy changes expected. Starting in December, OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, plans to increase production by 180,000 barrels per day per month.
The possibility of resuming oil production in Libya also put pressure on the market. Libya's eastern-based parliament on Monday agreed to approve the candidacy of a new central bank governor, which could help end the crisis that has sharply reduced oil production in the country.
In China, manufacturing activity fell sharply in September, a private sector survey showed on Monday. Analysts say that the series of stimulus measures over the past week will likely be enough to bring China's growth back to around 5% in 2024 after several months of below-forecast data cast doubt on that goal, although the long-term outlook remains unchanged.
Israel launched ground incursions into Lebanon on Tuesday, and its military said troops had launched raids against Hezbollah targets in the border area. The attacks follow Israel's assassination of Hezbollah chief Hassan Nasrallah on Friday and are an escalation of the conflict that now threatens to draw in the United States and Iran, agency writes.
"Weighing the risks for oil futures in the coming month depends on what Israel might do next and whether there will be a direct confrontation with Iran," said independent oil analyst Gaurav Sharma.
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