Brent falls by 5% to $71 amidst demand concerns

Oil prices are on track for a weekly decline on Friday with expectation of an increase in major oil producers amid weakening global demand.

Brent fell by 4.8% to $71 per barrel over an unimpressive demand outlook.

West Texas Intermediate (WTI), the American benchmark, traded at $67.60 a barrel.

Saudi Arabia, the biggest producer in the Organization of the Petroleum Exporting Countries (OPEC), is expected to ramp up output from December in a bid to reclaim market share.

In June, the OPEC+ group, consisting of OPEC members and other big producers such as Russia, agreed to extend additional voluntary cuts of 2.2 million barrels per day until the end of September, slowly phasing out until September 2025.

Though, the country’s policy seems to have changed towards a supply hike as output surge from non-OPEC producers and weaker global demand offset the group’s efforts to keep prices higher.

Supply concerns eased in Libya this week as the political situation in the country appeared to stabilize.

The UN Support Mission in Libya announced Wednesday that Libya’s House of Representatives and the High Council of State in Tripoli reached an agreement to appoint the head and deputy of the Central Bank.

The decision supports the expectation that oil production will return to normal levels. Forecast of a global supply uptick while demand from major consumers drops is putting downward pressure on oil prices.

Further, the concern that the stimulus plan announced in China this week will fall short in reviving the economy pushed prices lower. Analysts worry that weak crude oil demand in the world’s largest oil importing country will lower global demand.

Experts say the People’s Bank of China (PBoC) needs to announce a more concrete fiscal approach to support economic growth in the nation.

US natural gas edged lower and fell by more than 1% on Friday despite a bullish storage report, as Hurricane Helene is expected to have a greater impact on demand (due to disruptions to LNG exports) than supply.

US Energy agency ,EIA, weekly data shows that US gas storage increased by 47Bcf last week, less than the 52Bcf increase the market was expecting and well below the 5-year average increase of 88Bcf.

Total gas stockpiles totalled 3.49Tcf as of 20 September, 7.1% above the 5-year average.

Last week, gold prices were on track for their strongest quarter in over eight years, reaching a series of record highs in recent sessions. Gold increased by about 1.00% week-on-week, reaching $2,674.30 per ounce.

Watch the latest edition of BizTech below:

Ghana’s leading digital news platform, GhanaWeb, in conjunction with the Korle-Bu Teaching Hospital, is embarking on an aggressive campaign which is geared towards ensuring that parliament passes comprehensive legislation to guide organ harvesting, organ donation, and organ transplantation in the country.

Click here to follow the GhanaWeb Business WhatsApp channel