Pump pumps are operating as the Lake Fire burns in the Los Padres National Forest near Los Olivos, California, on July 6, 2024, and an evacuation warning is issued for the area.
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Oil prices extended losses in Asian trading after reports that Libyan oil production was about to resume weighed on prices overnight.
OPEC+ plans to boost production amid China’s economic weakness also dragged oil prices lower.
Global benchmark Brent crude oil fell 0.57% to $73.33 per barrel, while the U.S. West Texas Intermediate Oil Futures fell 0.65% to $69.88 a barrel.
Andy Lipow, president of Lipow Oil Associates, said the drop in oil prices was the result of a number of events.
“First of all, China’s monthly purchasing managers index released this weekend showed a contraction for the fourth consecutive month, which is disappointing,” he said. Over the weekend, China officially released its Purchasing Managers Index for August, which fell to Six-month low 49.1.
In a report released in late August, Goldman Sachs predicted a “sharp slowdown” in China’s oil demand, much of it attributed to a shift away from oil toward natural gas and electric vehicle power generation. China is the world’s largest oil importer and second largest consumer.
Libo also pointed out that a political solution in Libya is likely to be achieved and the production that has been in trouble can be restored. Cut production by 700,000 barrels per day Due to local lockdown. Libyan Africa’s largest oil reserves.
On Tuesday, reports emerged that a hostile government in Libya may broker a deal This will help restore oil production after several days of disruption. The government in eastern Benghazi has cut output amid a dispute with the U.N.-backed government in Tripoli over leadership of the central bank.
Joshua Young, founder of oil and gas investment firm Bison Interests, said concerns about OPEC+ adding more production to a market that is clearly oversupplied also contributed to the price decline.
Major members of the oil group said they would increase production by 180,000 barrels per day. According to Reuters.
—CNBC’s Spencer Kimball contributed to this report.
