Oil Prices Extend Losses on Hopes for Libyan Resolution and Global Demand Concerns
Oil prices continued to fall on Wednesday, following a more than 4% drop the previous day, as hopes for a resolution to the political dispute in Libya and worries about lower global demand weighed on the market.
Crude futures for November decreased by 0.4% to $73.47, after a 4.9% decline in the previous session. Meanwhile, U.S. West Texas Intermediate crude futures for October were down 0.4% to $70.03, following a 4.4% drop on Tuesday.
The ongoing political dispute in Libya, which has disrupted exports, showed signs of potential resolution as two legislative bodies agreed to jointly appoint a central bank governor. This development raised hopes for a return to normal production levels.
Market sentiment was also dampened by concerns about weak economic indicators from China and the United States, indicating sluggish fuel demand. Manufacturing data from both countries pointed to subdued activity, adding to the downward pressure on oil prices.
Additionally, U.S. inventory data, delayed due to the Labor Day holiday, is expected to show a decrease in oil and gasoline stockpiles, while distillate inventories likely increased. This could further impact market dynamics in the coming days.
Overall, the combination of potential resolution in Libya, concerns about global demand, and inventory data will continue to influence oil prices in the near term. Investors should closely monitor these developments for potential opportunities or risks in the energy market.