Oil prices were choppy on Friday, with traders closely monitoring stimulus measures from China and the potential increase in output from Libya and the OPEC+ oil group. As of 09:43 ET (13:43 GMT), futures were down by 0.4% to $70.81 per barrel, while US crude futures had fallen by 0.3% to $67.48 a barrel.
Competing factions in Libya have agreed to end a dispute over control of the country’s central bank, potentially allowing over 500,000 barrels per day (bpd) of Libyan supply to return to the market. Additionally, OPEC+ is planning to gradually reverse ongoing output cuts, starting from December, with a target of 180,000 bpd increase each month.
Saudi Arabia, the top oil exporter and leader of OPEC+, is reportedly preparing to abandon its unofficial price target of $100 a barrel in order to boost production. The kingdom has denied targeting a specific oil price, and sources indicate that the planned output increase in December is in line with existing policy.
Despite recent declines in oil prices, OPEC+ is expected to move forward with plans to increase output in September. This decision may be offset by some members making deeper cuts to comply with agreed quotas.
Investors are watching closely how the potential uptick in oil supply will be impacted by China’s stimulus package. Uncertainty remains over whether the measures will stimulate activity in the world’s largest oil importer.
Analysis: The fluctuating oil prices reflect the delicate balance between supply dynamics and global economic factors. Traders should monitor developments in Libya, OPEC+ decisions, and China’s stimulus impact on oil demand. The outcome of these events could have significant implications for oil markets and investor portfolios.