- Oil prices fall on prospects of lower Saudi Arabia price target.
- Saudi Arabia's Potential Drop in Crude Oil Prices.
- Saudi Arabia is preparing to abandon its unofficial price target of $100 per barrel to boost output.
Brent crude futures dropped by 55 cents, or 0.75%, to $72.91 per barrel, while US West Texas Intermediate crude fell 55 cents, or 0.79%, to $69.14 per barrel as of 0502 GMT.
According to the source, Saudi Arabia is preparing to give up its unofficial price target of $100 per barrel in anticipation of boosting output.
Earlier in the session, oil prices had risen amid signs of stronger fuel demand and declining US inventories, particularly as the US remains the world’s largest crude oil consumer. Concerns over global demand, especially in China, continue to loom.
"With regards to China, on top of this week’s easing measures announced on Tuesday, fiscal stimulus is likely required to boost household consumption, and to reignite flagging animal spirits," said Tony Sycamore, a market analyst at IG.
Further pressure on prices came from the potential return of Libyan oil after progress was made in appointing a central bank governor, which could help resolve the conflict over the country’s oil revenues.
Despite data showing stronger-than-expected demand in the US, ANZ Research noted, "Any revival in Libyan production would return to a market that is already beset by concerns of weak demand in the US and China"
The Energy Information Administration (EIA) reported a significant drop in US oil inventories, with gasoline demand rising to over 9 million barrels per day and distillate fuel demand surpassing 4 million barrels per day last week.
Looking ahead, IG's Sycamore expects markets to focus on month-end positioning, adding, "Then it's all about next Friday's nonfarm payrolls, given the soft consumer confidence numbers earlier in the week, with a wary eye watching events in the Middle East"
US consumer confidence saw its steepest decline in three years in September, stoking fears over the labor market.
The US nonfarm payrolls report is expected on Oct. 4.
Meanwhile, geopolitical tensions continue to escalate. The US, France, and several allies called for a 21-day ceasefire across the Israel-Lebanon border, while also supporting a ceasefire in Gaza amid intense UN discussions. Israel extended its airstrikes in Lebanon on Wednesday, resulting in at least 72 fatalities, heightening concerns of a potential wider conflict in the oil-producing Middle East region.
[embedpost slug="/gold-rate-in-pakistan-on-sept-26-up-by-rs1500-to-rs277000-tola/"]
