After a slight drop on Friday, the oil prices came further down on Monday amid anticipation that the expected output increase by OPEC+ will negate the shortage caused by a halt in production and export in Libya.
Brent crude saw a 0.7% or $0.57 slide to trade at $76.36 per barrel, while West Texas Intermediate (WTI) is trading at $73.05 a barrel after a 0.7% or $0.50 drop. Brent was already 0.3% down the previous week, while WTI slipped 1.7% at the same time.
There were previously concerns that the lack of Libya’s production would cause disruption in the global market, considering the country’s status as one of the biggest producers and exporters of oil.
However, experts believe that there won’t be a shortage of supply as OPEC+ plans to ramp up its output in October when eight members plan to produce an additional 180,000 barrels per day each. The weakening demand for oil in the United States and China, two of the largest consumers, is also playing a role.
Additionally, the situation in Libya continues to get better, and production might be halted shorter than expected.
“The current disturbances in Libya’s oil production could provide room for added supply from OPEC+. But these fluctuations have become quite normal over the last few years, meaning any outages will probably be shortlived; with the news flow indicating signals for a restart of production have already been given,” Bjarne Schieldrop, chief commodity analyst at SEB, told Reuters.