Investing.com – U.S. oil futures settled lower Wednesday despite hopes that a group of major producers will continue limiting supply to offset demand growth concerns.
At 19:30 EST (13:30 GMT), crude oil futures fell 1.6% to settle at $69.20 a barrel and fell 1.4% at $72.70 a barrel.
OPEC+ may delay planned output hike
The Organization of Petroleum Exporting Countries and allies, a group known as OPEC+, is discussing a delay in a planned output increase next month, Reuters reported earlier Wednesday, citing sources from the producer group.
Eight OPEC+ members are scheduled to raise output by 180,000 barrels per day (bpd) in October as part of a plan to begin unwinding their most recent layer of output cuts of 2.2 million bpd.
Market volatility from oil facility shutdowns in Libya and a weak demand outlook have raised concerns within the group, according to the report, with one source saying a delay was looking “highly possible” at this stage.
Potential end to a dispute in Libya
Both benchmarks slumped more than 4% during the previous session, falling to their lowest levels since mid-December, following news over a potential resolution of a dispute in Libya that has caused a halt in the country’s crude production and exports.
Libya’s legislative bodies have reportedly agreed to name a new central bank governor within 30 days, following United Nations-sponsored discussions.
The announcement on Tuesday raised hopes for an end to the political deadlock that has severely disrupted Libya’s oil exports.
On Monday, major Libyan ports ceased oil exports, and production was cut throughout the nation due to a standoff between rival factions vying for control of the central bank and access to oil revenues.
The impact of the dispute on Libya’s oil output has been stark. The National Oil Corporation (NOC) reported that total production had dramatically fallen to just over 591,000 bpd on August 28, down from nearly 959,000 bpd two days earlier, according to Reuters.
This marked a significant drop from approximately 1.28 million on July 20, indicating the severity of the production cuts.
Demand growth worries weigh
Also hitting sentiment Tuesday was a weak U.S. manufacturing activity data release, raising fears that the world’s largest economy was heading for a hard landing, and a possible recession.
Concerns about economic slowdowns in China, Europe and the U.S. have weighed on the crude market for some time, with some traders worried that central banks, and the Federal Reserve in particular, have held interest rates at elevated levels for too long as they attempt to conquer inflation.
Weekly U.S. inventory data has been delayed by Monday’s Labor Day holiday. The report from the American Petroleum Institute is due later in the session, while data from the Energy Information Administration will be published on Thursday.