Oil prices continued their losses on Monday amid expectations of increased production by OPEC+ starting in October. This coincided with signs of slowing demand in China and the United States, raising concerns about future consumption growth.
Sources from the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, told Reuters that the organization is preparing to implement planned increases in oil production starting in October. Eight OPEC+ member countries are set to increase their output by 180,000 barrels per day in October as part of a plan to ease supply cuts amounting to 2.2 million barrels per day, while continuing other reductions until the end of 2025.
Both Brent and West Texas Intermediate (WTI) crude have recorded consecutive losses over the past two months, as demand concerns from the U.S. and China overshadowed the impact of recent disruptions in Libyan oil supplies and risks related to the conflict in the Middle East. While Libyan oil exports remain halted, the Arabian Gulf Oil Company has resumed production at a rate of up to 120,000 barrels per day to meet local needs.
Pessimism regarding demand growth in China increased after an official survey on Saturday showed that manufacturing activity dropped to its lowest level in six months in August. Additionally, data from the U.S. Energy Information Administration on Friday revealed that U.S. oil consumption in June fell to its lowest seasonal levels recorded during the COVID-19 pandemic in 2020.
