Oil prices continued to fall on Monday, driven by anticipated increases in OPEC+ production from October and signs of weakening demand in China and the United States.
By 0815 GMT, Brent crude futures had decreased by 21 cents, or 0.3%, to $76.72 a barrel, while US West Texas Intermediate crude was down 14 cents, or 0.2%, at $73.41. Both Brent and WTI had already fallen 1.4% and 3.1%, respectively, on Friday. According to Chris Weston, head of research at Pepperstone, there is a risk that prices could dip further, possibly revisiting multi-month lows.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, are expected to increase oil production starting in October. Sources within the producer group revealed that eight OPEC+ members will raise output by 180,000 barrels per day (bpd) as part of a strategy to begin unwinding recent supply cuts of 2.2 million bpd, while maintaining other cuts until the end of 2025.
Analyst Achilleas Georgolopoulos from brokerage XM expressed concerns that the production boost could further imbalance supply and demand, putting additional downward pressure on prices. He noted that this increase comes at a time when the global economy is showing signs of slowing, particularly with disappointing data from China.
Both Brent and WTI have experienced declines for two consecutive months, driven by concerns over US and Chinese demand, which have overshadowed recent disruptions in Libyan oil supply and regional conflict risks in the Middle East.
Although Libyan oil exports remain halted, the Arabian Gulf Oil Company has resumed production at up to 120,000 bpd to fulfill domestic requirements. Additionally, a recent official survey indicated that China’s manufacturing activity fell to a six-month low in August, exacerbating worries about the country’s economic growth.
In the US, oil consumption in June hit seasonal lows not seen since the COVID-19 pandemic in 2020, according to data from the Energy Information Administration.
