Oil prices are on track for a weekly decline on Friday with expectation of an increase in major oil producers amid weakening global demand.
The International benchmark Brent crude traded at $70.89 per barrel at 3.30 p.m. local time (1230 GMT) on Friday, down by around 4.8% relative to the closing price of $74.49 a barrel last week.
West Texas Intermediate (WTI), the American benchmark, traded at $67.60 a barrel at the same time on Friday, a decrease of about 6% from last Friday’s session, which closed at $71.92 per barrel.
Saudi Arabia, the biggest producer in the Organization of the Petroleum Exporting Countries (OPEC), is expected to ramp up output from December in a bid to reclaim market share.
In June, The OPEC+ group, consisting of OPEC members and other big producers such as Russia, agreed to extend additional voluntary cuts of 2.2 million barrels per day until the end of September, slowly phasing out until September 2025.
Though, the country’s policy seems to have changed towards a supply hike as output surge from non-OPEC producers and weaker global demand offset the group’s efforts to keep prices higher.
Supply concerns eased in Libya this week as the political situation in the country appeared to stabilize.
The UN Support Mission in Libya announced Wednesday that Libya’s House of Representatives and the High Council of State in Tripoli reached an agreement to appoint the head and deputy of the Central Bank.
The decision supports the expectation that oil production will return to normal levels.
Forecast of a global supply uptick while demand from major consumers drops is putting downward pressure on oil prices.
Further, the concern that the stimulus plan announced in China this week will fall short in reviving the economy pushed prices lower.
Analysts worry that weak crude oil demand in the world’s largest oil importing country will lower global demand.
Experts say the People’s Bank of China (PBoC) needs to announce a more concrete fiscal approach to support economic growth in the nation.
