Oil prices fell sharply during these moments of trading on Thursday, reversing previous gains, after news that the largest oil exporter, Saudi Arabia, abandoned its oil price target in preparation for increasing production, which affected the market.
Brent crude futures fell 3.4% to $70.4 a barrel, while US West Texas Intermediate crude fell 3.5% to $67.2 a barrel by 09:10 Riyadh time.
A major change in the Kingdom's policies
Saudi Arabia is preparing to abandon its informal target of $100 a barrel for crude oil as it prepares to boost production, in a sign that the kingdom is ready for a period of lower oil prices, according to people who spoke to the Financial Times.
The world’s largest oil exporter and seven other members of the OPEC+ group were due to end long-term production cuts from early October. But a two-month delay has raised speculation about whether the group will ever be able to increase output, with Brent crude briefly falling below $70 earlier this month, its lowest since December 2021, according to the newspaper.
However, officials in the kingdom are insisting they are committed to restarting production as planned on December 1, even if it leads to a prolonged period of lower prices, the people told the Financial Times.
The shift in thinking represents a major change in course for Saudi Arabia, which has led other OPEC+ members in repeatedly cutting production since November 2022 in an attempt to keep prices high.
A major change in the Kingdom's policies
Saudi Arabia is preparing to abandon its informal target of $100 a barrel for crude oil as it prepares to boost production, in a sign that the kingdom is ready for a period of lower oil prices, according to people who spoke to the Financial Times.
The world’s largest oil exporter and seven other members of the OPEC+ group were due to end long-term production cuts from early October. But a two-month delay has raised speculation about whether the group will ever be able to increase output, with Brent crude briefly falling below $70 earlier this month, its lowest since December 2021, according to the newspaper.
However, officials in the kingdom insist they are committed to restoring production as planned on December 1, even if it leads to a prolonged period of lower prices, the people told the Financial Times.
The shift in thinking represents a major change in course for Saudi Arabia, which has led other OPEC+ members in repeatedly cutting production since November 2022 in an attempt to keep prices high.
Market ignores data
The market shrugged off data showing stronger demand in the US, according to a note from ANZ Research, as the US Energy Information Administration (EIA) reported that US oil inventories fell more than expected last week.
ANZ Bank said: Any recovery in Libyan production will return to a market already suffering from concerns about weak demand in the United States and China.
However, Energy Information Administration data showed that gasoline demand last week rose to more than 9 million barrels per day, while demand for distillate fuels supplied to the market rose to more than 4 million barrels per day.
ANZ note: Focus will be on Friday's non-farm payrolls report, given weak consumer confidence figures earlier in the week, with a cautious eye on events in the Middle East.
U.S. consumer confidence fell by the most in three years in September amid mounting concerns about the labor market, according to a survey released Tuesday.
The US non-farm payrolls report is expected on October 4.
The United States, France and several allies called for an immediate 21-day ceasefire on the border between Israel and Lebanon, while expressing support for a ceasefire in Gaza following intensive discussions at the United Nations.
