(Bloomberg) — Oil prices fell for a second straight day as Saudi Arabia was reported to be considering increasing production and Libyans reached a deal that could pave the way for some crude output to resume.
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Brent fell below $72 a barrel, a loss of almost 5% since Tuesday’s close, while West Texas Intermediate was close to $68. Saudi Arabia is planning to abandon its unofficial oil price target of $100 a barrel in a bid to regain market share, the Financial Times reported, citing sources familiar with the deliberations.
Representatives of Libya’s rival eastern and western governments have signed an agreement on steps for the leadership of the OPEC member’s central bank, the United Nations said.
The potential output revival in Saudi Arabia and Libya comes as crude heads for its worst quarter this year, hurt by the prospect of additional supply from OPEC+ and China’s bleak economic outlook. While oil traders had largely ignored China’s previous monetary stimulus, President Xi Jinping on Thursday called on the government to step up fiscal spending, underscoring growing concerns in Beijing about the country’s slowing growth.
A stronger dollar has also hurt commodities like oil, which are priced in the currency. The dollar rose by the most in three months on Wednesday, according to a Bloomberg indicator, as risk appetite eased in broader markets.
Meanwhile, the US, the European Union and major Middle Eastern powers including Saudi Arabia and Qatar have proposed a three-week ceasefire between Israel and Hezbollah in Lebanon, part of an effort to pave the way for negotiations and avoid all-out war in the region.
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