(Bloomberg) -- Oil slid for the second day as Saudi Arabia was reportedly committed to increasing output in December, while Libya named its new central bank governor, opening the way to reviving some crude production.
West Texas Intermediate dropped almost 3% to settle below $68 a barrel while global benchmark Brent slid to just above $71 a barrel. Saudi Arabia is ready to abandon its unofficial oil price target of $100 a barrel in a bid to regain market share, the Financial Times reported, citing people familiar with the country’s stance.
Representatives from Libya’s rival eastern and western administrations signed an agreement to name Naji Issa as the new governor of Libya’s central bank, a move aimed at ending an impasse over the stewardship of the regulator that had crippled oil exports. Libya’s eastern-based government has also promised to reopen the country’s oil fields shortly, the United Nations’ envoy to the OPEC state, Stephanie Koury, said Thursday in a televised press conference.
The potential revival in Saudi and Libyan production comes after crude earlier this month fell to the lowest since 2021, hurt by the prospect of additional supply from OPEC+ and China’s dour economic outlook. The International Energy Agency has said global oil markets will be oversupplied next year with or without extra OPEC+ supplies because of surging output from outside the group.
“There is no room for more OPEC+ oil on the market if the cartel wants an oil price close to $80 in 2025,” analysts at A/S Global Risk Management said in a report. “We assess that the Saudis are trying to put significant pressure on the quota cheaters.”
Meanwhile, the US, European Union, and major powers in the Middle East have proposed a three-week cease-fire between Israel and Hezbollah in Lebanon, part of a bid to clear the way for negotiations and avert an all-out war in the region. Israel ordered the military to keep bombarding Hezbollah targets in Lebanon and denied interest in a truce.
While oil traders had largely shrugged off China’s earlier monetary stimulus measures, President Xi Jinping on Thursday called for the government to provide more fiscal spending, underscoring the growing anxiety in Beijing over the nation’s slowing growth.
Helene became a major hurricane and is expected to strengthen even more on its path to Florida’s west coast. Oil and gas companies had evacuated some offshore workers in the Gulf of Mexico and shut in around 29% of oil production as of Wednesday.
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--With assistance from Julian Lee and Paul Burkhardt.
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