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Oil prices stabilized today, Friday, but remained on track to record a weekly decline as investors evaluated the impact of expectations of increased production from Libya and other countries in the OPEC+ alliance in exchange for economic stimulus plans implemented by China, the largest oil importer.
By 0840 GMT, Brent crude futures rose slightly by eight cents, or 0.1 percent, to $71.68 per barrel.
US West Texas Intermediate crude futures also rose six cents, or 0.1 percent, to $67.73 per barrel.
On a weekly basis, Brent crude is expected to decline by about four percent, while US crude is heading for a loss of approximately six percent.
“OPEC+’s latest decision to increase production has only led to more pessimism,” said Priyanka Sachdeva, a market analyst at Philip Nova, adding that the oil market is facing difficulties in light of weak demand over the past few months.
She continued, “Although it is not certain that the Chinese stimulus will cause higher demand for fuel, it may provide some support to the oil market.”
On Friday, the Chinese Central Bank lowered interest rates and injected liquidity into the banking system with the aim of returning economic growth towards this year’s target of about five percent.
More financial measures are expected to be announced before the holiday season in China, which begins on October 1.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as the OPEC+ alliance, intend to move forward with implementing an increase in production by 180,000 barrels per day starting in December.
The Financial Times reported on Wednesday that this planned increase is due to Saudi Arabia’s decision to abandon the goal of oil price reaching $100 per barrel and its intention to increase production in order to regain its market share.
