Oil continues losses, OPEC+ supply increases likely | Economy

Oil prices extended losses on Monday as investors expected OPEC+ output to rise from October and signs of weak demand in China and the United States, the world’s biggest oil consumers, raised concerns about future consumption growth.

By 06:46 GMT, Brent crude futures were down 56 cents, or 0.7%, at $76.37 a barrel, while West Texas Intermediate (WTI) crude futures were down 45 cents, or 0.6%, at $73.10 a barrel.

The losses come after a 0.3% decline in Brent crude last week, and a 1.7% decline in West Texas Intermediate crude.

Six sources from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, or the group known as OPEC+, told Reuters that the group is close to moving forward with a planned increase in oil production from October.

OPEC Plus increases production

Eight OPEC+ members are set to increase their output by 180,000 barrels per day in October, as part of a plan to begin gradually removing the latest tranche of 2.2 million barrels per day of production cuts, while continuing to make further cuts until the end of 2025.

“There are concerns that OPEC will go ahead with raising production from October,” said Tony Sycamore, market analyst at IG.

“But I think it depends on the prices, because it happens if WTI is closer to $80 than $70,” he added.

Both Brent and WTI crude have suffered losses for two straight months, as economic concerns in China and the United States offset the impact of Libyan supply disruptions and rising geopolitical tensions in the Middle East.

Libya resumes

In Libya, the Arabian Gulf Oil Company has resumed production of up to 120,000 barrels per day to meet local needs, while exports remain halted, engineers said on Sunday, after a dispute between armed factions caused most of the country’s oil fields to close.

Pessimism over China’s demand growth deepened after an official survey showed on Saturday that manufacturing activity there fell to a six-month low in August as retail prices at factories fell and orders slumped, although a private survey covering smaller, export-oriented firms on Monday showed signs of a tentative recovery in the month.

Data from the US Energy Information Administration showed last Friday that oil consumption in the United States slowed in June to its lowest seasonal levels since the Corona pandemic in 2020.