By Florence Tan
SINGAPORE - Oil prices continued to decline on Monday as OPEC+ prepares to increase production in October, counteracting a decrease in output from Libya and sluggish demand in China and the U.S., the world's top two oil consumers.
Crude oil futures dropped 0.7% to $76.36 a barrel for Brent and $73.05 a barrel for WTI as of 0108 GMT. This follows last week's 0.3% and 1.7% declines for Brent and WTI, respectively.
OPEC+ plans to raise oil output by 180,000 barrels per day in October, with concerns mounting that this could lead to an oversupply if prices are closer to $80 than $70.
Meanwhile, Libya has resumed domestic production but exports remain halted due to a standoff between factions, contributing to the overall decline in oil prices.
Both Brent and WTI have seen losses for two consecutive months due to economic worries in China and the U.S., despite geopolitical tensions in the Middle East.
With China's manufacturing activity at a six-month low and U.S. oil consumption slowing to pre-pandemic levels, analysts predict a downward trend in oil prices unless OPEC+ delays its production hikes.
The number of active U.S. oil rigs remained steady at 483 last week, according to Baker Hughes.
Analysis:
In summary, oil prices are falling due to a combination of higher OPEC+ production, reduced output from Libya, and weak demand in key markets like China and the U.S. This could result in lower oil prices in the near future unless OPEC+ decides to delay its planned production increases. As a consumer, this could mean lower fuel prices in the short term, but it may also indicate broader economic concerns that could impact global markets and investments.