Oil prices fell on Thursday, reversing earlier gains, as Saudi Arabia signaled it is ready to abandon its unofficial $100 per barrel crude oil price target to increase output. Brent crude futures dropped 55 cents, or 0.75%, to $72.91 a barrel, while U.S. West Texas Intermediate (WTI) crude fell by the same margin, or 0.79%, to $69.14 per barrel.
This development followed a report from the Financial Times, citing sources familiar with Saudi Arabia’s plans to expand production. The market was previously bolstered by stronger U.S. fuel demand and falling inventories, though this was overshadowed by concerns over global demand, particularly in China.
Analysts also pointed to Libya’s potential return to the oil market after progress in resolving its internal crisis. Tony Sycamore, a market analyst at IG, noted that additional fiscal stimulus in China could be necessary to boost consumption and address broader economic concerns.
Despite positive U.S. oil demand data from the Energy Information Administration (EIA), including a rise in gasoline and distillate fuel demand, the market was overshadowed by ongoing concerns over demand in key regions like the U.S. and China.
Geopolitical tensions in the Middle East, particularly the conflict between Israel and Lebanon, added to market uncertainty. Israel’s widening airstrikes and potential for a ground assault in Lebanon have raised fears of a broader conflict in the oil-rich region.
Markets are expected to focus on month-end positioning and the upcoming U.S. nonfarm payrolls report, due on October 4, as U.S. consumer confidence continues to decline amid labor market concerns.
