WTI falls near $72.50 as OPEC+ plans to increase production
- WTI price depreciates as Eight OPEC+ members are set to raise production by 180,000 barrels per day next month.
- Crude Oil prices may find support due to supply concerns arising from export disruptions in Libya’s Oilfields.
- Oil faces challenges due to weak demand in China and the United States.
The West Texas Intermediate (WTI) oil price fell for the second consecutive session, trading around $72.50 per barrel during Monday’s Asian hours. This fall could be attributed to the Organization of Petroleum Exporting Countries and Their Allies’ (OPEC+) plans to raise output in the coming quarter.
Reuters reported, citing six sources, that OPEC+ is planning to increase oil supply beginning in October. Eight OPEC+ countries plan to increase output by 180,000 barrels per day (bpd) next month as part of a strategy to begin unwinding its most recent 2.2 million bpd decrease, while continuing additional cuts until the end of 2025.
However, the drop in crude oil prices may be restricted due to supply concerns resulting from export disruptions in Libya’s oilfields caused by a standoff between factions. Nonetheless, the Arabian Gulf Oil Company has resumed production of up to 120,000 barrels per day to suit domestic demand.
Weak demand in China and the United States, the world’s two largest oil consumers, may put downward pressure on WTI prices. According to an official survey, China’s industrial activity reached a six-month low in August, with factory gate prices falling considerably. This has pushed Chinese policymakers to move forward with plans to enhance household stimulus.
According to figures released on Friday by the US Energy Information Administration (EIA), oil consumption in the United States fell to its lowest seasonal levels since the 2020 coronavirus pandemic in June. ANZ experts predicted that growth in 2025 could slow due to economic challenges in China and the United States. They feel that OPEC may need to postpone the phase-out of voluntary production cutbacks if it wants to attain better prices.
