Oil falls with prospect of increased production by Saudi Arabia and OPEC+ – Money Times

O oil extended the previous day's losses and closed at a new low with rumors that the Organization of Petroleum and Allied Exporting Countries (OPEC+) should increase production of the commodity in December. The resumption of operations in Libya and the promise of new stimulus in China also had an impact on crude oil.

This Thursday (26), the most liquid contracts in the Brent oila reference for the international market for December, ended the session with a drop of 2.48%, at US$ 71.09 per barrel, on the Intercontinental Exchange (ICE), in London.

The contracts of the West Texas Intermediate oil (WTI) for November fell 2.90%, to US$67.67 per barrel, on the New York Mercantile Exchange (Nymex), in the United States.

What moved oil today?

Oil is considered one of the thermometers of investors' mood in the market. But, this Thursday (26), news about the commodity weighed on performance.

Even with the New York and European stock exchanges at intraday highs, oil fell by more than 3%.

The commodity reflected the news that Saudi Arabia, the world's largest oil exporter, will give up its target price per barrel of US$100 to increase production. The information was released by the Financial Times.

Furthermore, the Organization of Petroleum Exporting Countries and Allies (OPEC+) is expected to continue increasing production of the commodity in December, in an attempt to “compensate” for voluntary cuts in supply by some members of the group.

According to sources told Reuters, the measure should have a small impact, but it has raised concerns about oil demand amid the slowdown in the world's main economies — such as China.

In recent months, some OPEC members, such as Russia and Saudi Arabia, have been cutting oil production to support prices.

Furthermore, the expectation of Libya's resumption of oil production puts pressure on the commodity's performance.

Yesterday (25), new members of the Central Bank were appointed, in resolution of the conflict that began in August.

Last month, Libya's eastern government in Benghazi reported that oil production and exports had been halted due to a dispute with the internationally recognized western government in Tripoli over who should lead the Central Bank.

Libya's crude oil exports averaged around 400,000 barrels per day (bpd) in September, down from more than 1 million bpd in August.

The tension with conflicts in the Middle East also affects oil.

Oil market analysts have been warning for months that a war between Israel and Hezbollah, who have so far been exchanging rocket fire, could force Iran — a member of the Organization of Petroleum Exporting Countries (OPEC) — to intervene directly, increasing oil prices. risk of disruptions in crude oil supplies in the Middle East.

*With information from Reuters and Financial Times