Oil prices fell on Monday, continuing the losses from last week due to the expected higher OPEC+ production from October. Concerns about sluggish demand in China and the United States also contributed to the decline in prices. At 1020 GMT, Brent crude futures were down 8 cents (0.1%) at $76.85 a barrel, while U.S. West Texas Intermediate crude slipped 11 cents (0.2%) to $73.44. Chris Weston, head of research at brokerage Pepperstone, warned that prices could revisit multi-month lows with the current downward momentum.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, are set to proceed with planned increases in oil output from October, with eight OPEC+ members scheduled to boost output by 180,000 barrels per day (bpd) as part of the plan. Achilleas Georgolopoulos, investment analyst at brokerage XM, expressed concerns that larger production increases could worsen the demand-supply balance and put more pressure on prices, especially considering a possible global economic slowdown.
Both Brent and WTI have experienced losses for two consecutive months, mainly due to demand concerns in the U.S. and China, despite disruptions in Libyan oil supply and supply risks related to conflict in the Middle East. Shell also announced plans to reduce its oil and gas exploration and development workforce by 20%.
The Arabian Gulf Oil Company has resumed output at up to 120,000 bpd to meet domestic needs, following the halt in Libyan exports. Additionally, concerns about Chinese demand growth increased after an official survey showed that manufacturing activity sank to a six-month low in August. This, along with a decline in oil consumption in the U.S. in June, led to further pessimism about the global economy and oil demand.