Market News
Oil begins new quarter under pressure as supplies set to climb - REUTERS
(Bloomberg) — Oil slipped at the start of the fourth quarter as a bearish market outlook countered geopolitical risks in the Middle East.
Brent (BZ=F) traded near $71 a barrel after ending Monday modestly higher. Libya is preparing to restore output after its two rival governments reached a deal over leadership of the central bank, according to people familiar with the matter. Yet tensions persist in the Middle East, with Israel starting ground raids in Lebanon.
The global crude benchmark plunged almost 17% last quarter, and is now lower year-to-date. Prices have been dragged down by expectations that OPEC+ will make good on plans to bring back production, as well as a slowdown in China.
“I assume today’s weakness is driven by stop-loss selling from traders once again trying to buy the geopolitical event,” said Ole Hansen, head of commodities strategy at Saxo Bank. “Instead, a much more tangible production increase from Libya remains the focus.”
Top trader Gunvor Group said Tuesday that the market is concentrating more on the patchy demand outlook than on geopolitical risks to supply.
Traders are also looking ahead to OPEC+’s potential ramp-up in output. The alliance will hold an online monitoring meeting Wednesday to assess the market. Russian Deputy Prime Minister Alexander Novak said last week the group will start restoring supply in December and isn’t discussing any new proposals.
