Oil Prices Decline Amid Concerns of Oversupply

SadaNews - The price of oil declined at the beginning of the week, amid increasing fears that a new rise in production by the "OPEC+" alliance in November could exacerbate the oversupply in global markets.

Brent crude fell below $70 per barrel, after it had recorded a 5.2% increase last week, while West Texas Intermediate crude traded near $65. The alliance led by Saudi Arabia is considering raising production by at least the increase planned for October, which is 137,000 barrels per day, according to sources familiar with the group's plans.

It appears that "OPEC+" is adopting a new approach that focuses on regaining market share rather than the traditional role of stabilizing prices, by reintroducing more idle production capacity into the market. Despite this, prices have maintained some strength supported by strong demand from China.

The planned increase in October, as well as the potential increase in November, remains much lower than the increases announced by the group in previous months. Several delegates confirmed that the actual increase in supplies will be less than that, as some member countries are unable to raise their production.

Despite "OPEC+"'s attempts to gradually regulate supplies, the "International Energy Agency" has warned of a record oversupply that could hit the market by 2026, coinciding with the recovery of production from alliance members and increased supplies from competing producers.

According to "Goldman Sachs", the price of Brent crude is expected to fall to the mid-$50 range per barrel during the next year, despite the large storage operations currently led by China.