(Bloomberg) — Oil steadied as traders weigh a planned production increase from OPEC+ next month against currently lower output in Libya, while mindful of economic headwinds in China.
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Brent for November traded around $77 a barrel after losing more than 2% on Friday. West Texas Intermediate steadied under $74, with lower volumes expected Monday due to the US holiday.
The Organization of Petroleum Exporting Countries and its allies are due to add 180,000 barrels a day as they gradually restore production that’s been halted since 2022, according to delegates involved in the discussions.
Over the weekend, Chinese data showed factory activity contracted for a fourth month in August and a residential slump deepened, raising concerns the world’s top crude importer may struggle to meet this year’s economic growth target. India’s diesel sales also registered a sharp decline last month.
Oil has given up most of its gains this year as expectations of ample supply and signs of economic headwinds, including in the US, weighed on prices. Volatility has ramped up in recent weeks, with crude futures facing some of their largest intraday swings in months.
OPEC+ has repeatedly said it could “pause or reverse” its planned output hikes if necessary, though a political crisis in Libya that halved the nation’s production may have given the alliance the space to add more barrels.
“The oil market continues to trade on concerns about the possible ramifications for prices from a combination of rising OPEC+ output and a weaker global economic growth,” said Jens Naervig Pedersen, a strategist at Danske Bank. Last week’s dollar rebound “adds more pain,” he said.
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