Crude slips lower; OPEC output levels in spotlight
2024.09.02 07:48
Investing.com — Oil prices edged lower Monday, on concerns of slowing demand growth from major oil importer China as well as a potential supply boost from a group of top producers.
By 06:35 ET (10.35 GMT), the futures traded 0.1% lower at $73.45 a barrel and the contract dropped 0.1% to $76.81 a barrel.
Uncertainty over China’s economy
A private sector survey released earlier Monday indicated that China’s manufacturing activity swung back to growth in August, offering some hope for an economic rebound in the world’s top crude importer.
The rose to 50.4 in August from 49.8 the previous month.
However, this has had little impact on the crude market as the country’s showed on Saturday that Chinese manufacturing activity sank to a six-month low in August, raising doubts about future consumption from this key market.
Both Brent and WTI posted losses last week, adding to two consecutive weaker months as these demand concerns have outweighed recent disruptions in Libyan oil supply and tensions in the oil-rich Middle East.
OPEC future plans in spotlight
Investors are also looking ahead to planned oil output hikes from members of the Organization of Petroleum Exporting Countries and allies, known as OPEC+, next month.
Eight OPEC+ members are scheduled to boost output by 180,000 barrels per day in October, as part of a plan to begin unwinding their most recent layer of supply cuts of 2.2 million barrels per day.
“Given lingering demand concerns there had been a growing part of the market … who thought the group would delay any supply increases. The group may believe that supply disruptions from Libya provide an opportunity to increase supply,” said analysts at ING, in a note.
While Libyan exports remain halted, the Arabian Gulf Oil Company has resumed output at up to 120,000 bpd to meet domestic needs, engineers said on Sunday after the standoff between the factions shut most of the country’s oilfields.
