Oil Trades Near Nine-Month Low on Demand, OPEC+ Supply Concern
Oil traded near a nine-month low after crashing on concern that fragile demand and restored supplies from OPEC+ will create a new glut.
Brent futures, the international benchmark, hovered above $73 a barrel following a meltdown of almost 5% on Tuesday. West Texas Intermediate was little changed, after dropping under $70 for the first time since early January.
Downbeat economic data from China and the US stirred fears over demand in the top two consumers, while a Libyan official predicted a resolution to the crisis that has shuttered half the country's output. Despite the gloom, other OPEC+ nations appear set to proceed with reviving supplies in October.
The plunge intensified after Libya's ousted central bank governor, Sadiq Al-Kabir, predicted an end to the crisis that has slashed the North African nation's oil output in half. More than 500,000 barrels a day were halted last week when authorities in the east of the country protested Al-Kabir's removal by the Tripoli-based government.
Tuesday's sell-off was likely exacerbated by increasingly bearish trend-following algorithmic traders.
Meanwhile, speculators are growing increasingly anxious that Libya's partners in the Organizaton of Petroleum Exporting Countries seem set on proceeding with an agreement to restore halted production.
Led by Saudi Arabia and Russia, the OPEC+ alliance plans to add 180,000 barrels a day in October as it gradually restarts output halted since 2022 in a bid to shore up prices. The cartel had said it could "pause or reverse" the hike if necessary, but officials have privately indicated the increase remains on track.
Source: Bloomberg
