Oil Prices โRise Amidst Production Dynamics and โคDemand Concerns
Global oilโ prices experienced a modestโฃ increase onโ October 8th, driven โby a combination of factors related to production levels, market share strategies, and evolvingโ demand expectations. โWest Texas Intermediate (WTI) crude oil futures for October delivery rose 39 cents to settle at $62.26 a barrel, representing โa 0.63%โข gain. Simultaneously, london Brent crude oil futures โฃfor November delivery increased by โ52 cents to closeโ at $66.02 a barrel, aโข 0.79% rise.
Analysts attribute the price increase to the โfact thatโ production โincreases from major oil-producingโฃ nationsโ haveโฃ been smaller thanโค anticipated and considerably less ample than those seen in recent months. This comesโข after a โขseries of voluntary production cuts initiated in November 2023 by eight countries, totaling 2.2 million barrels per day, which wereโ repeatedly extended to the end of March 2025.
These cuts were implementedโ partly in response to increased production from countries likeโ the United States and โฃCanada, which led to a โขloss of market share for the original eight nations.โข In an attempt to regain some ground, โthose countries began a phased increaseโฃ in production starting April 1st.โค The average daily increase was 411,000 barrels in May, June, and July, rising to 548,000 barrels in August andโ 547,000 barrels in September.
The latest decision to increase production by 137,000โค barrelsโข per day โin October, whileโข relatively small, is viewed by analysts like Georgeโค Leon of Ruigui Energy as a โคsignificantโข signal. โค He โคsuggests that OPEC and its partners are prioritizingโฃ market share, even at the potential risk of lower prices.However, the ability to actually โincrease supply is limited. Analysts point โขout that Saudi Arabia and the united Arab โขEmirates are largely the only countries with significant capacity toโ boost production, asโค most other members are already operating near full capacity.Furthermore, ongoing Western sanctions against Russia and โคIran limit the potential for a dramatic price decline, providing some support for continued, albeit โmodest, production increases.โ So far this year,increased production has not resulted in a substantial drop in oil prices,which remain above the April low of $58 โฃper barrel.
Despiteโ these factors, concerns about future demand are weighing on the market.U.S. tariff policies are expected to suppress globalโฃ demand, leading to a projected surplus of crude oil supply. goldman Sachs forecasts an average dailyโข excess of approximately 1.9 million barrels in the global โฃcrudeโค oilโ market next year, an increase from aโ previousโ estimate of 1.7 million barrels per day.โ Consequently, goldman Sachs predicts Brent oil prices will fallโค to $64 per โฃbarrel in the fourth quarter of this โyear and average $56 per barrel in 2025.
Editor: Wangโค Xiaowei
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