Oil prices drop as OPEC+ plans higher output in October

Oil prices have continued to decline as investors react to the anticipated increase in production by OPEC+ starting in October. This decision comes despite a significant drop in oil output from Libya, which has been affected by internal conflicts. Brent crude futures fell to $76.36 a barrel, while U.S. West Texas Intermediate crude dropped to $73.05 a barrel, marking losses for both benchmarks over the past two months. Economic concerns in the U.S. and China, the largest consumers of oil, have overshadowed the supply disruptions from Libya. The Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, plan to raise output by 180,000 barrels per day in October as part of a strategy to gradually unwind previous production cuts. Analysts suggest that this increase is contingent on market prices, particularly if WTI approaches $80 per barrel. Meanwhile, Libya's Arabian Gulf Oil Company has resumed some production to meet domestic needs, although exports remain halted due to ongoing factional disputes. Recent data indicates that China's manufacturing sector is struggling, with activity hitting a six-month low, raising concerns about the country's economic growth. In the U.S., oil consumption has also slowed, reaching its lowest seasonal levels since the pandemic. These economic challenges are expected to impact global oil demand, leading to further price pressures. Analysts predict that OPEC may need to reconsider its production strategies if prices do not stabilize. The current market dynamics suggest that without a significant rebound in demand, OPEC's planned output increases could lead to further price declines, complicating the group's efforts to maintain higher oil prices in the long term.