Oil prices stabilized on Thursday after experiencing significant declines the previous day, influenced by indications of a possible increase in Libyan production. However, prices have remained strong this week, particularly following China’s announcement of several stimulus measures aimed at bolstering economic growth. Additionally, U.S. oil inventories decreased more than anticipated, suggesting a tighter market outlook.
Brent oil futures for November rose by 0.1 percent to $73.51 per barrel, while West Texas Intermediate (WTI) crude futures also increased by 0.1 percent, reaching $69.73 per barrel as of 20:57 ET (00:57 GMT). Both contracts fell by 2 percent on Wednesday but have seen substantial gains over the past two weeks, recovering from near three-year lows.
The oil market has been supported by rising tensions in the Middle East. Furthermore, a significant interest rate cut by the U.S Federal Reserve has enhanced sentiment regarding oil demand.
Libya moves toward production resumption
Oil prices dropped sharply on Wednesday following reports that delegates from Libyaโs eastern and western factions had reached an agreement on appointing a new central bank governor. This development is expected to help resolve a crisis that had significantly curtailed the countryโs oil production. Production disruptions had resulted in the loss of at least 1 million barrels per day, and any restoration of output could lead to a less constrained market.
U.S. inventories decline more than anticipated
Prices largely fell after data revealed a much larger-than-expected draw of 4.47 million barrels in U.S. inventories. Additionally, gasoline and distillate inventories also decreased, indicating robust U.S. demand. This draw occurred amid some production disruptions in the U.S., particularly due to adverse weather in the Gulf of Mexico. Production in the region was halted due to a hurricane earlier in September, and further disruptions are anticipated as Hurricane Helene moves through the Gulf this week.
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