Oil prices continued to fall on Tuesday on bleak economic data from top crude importer China and increase in supply from both US shale and OPEC producers.
The news that production at several offshore US Gulf of Mexico platforms is resuming after a brief outage last week has also boosted oil supply prospects amid OPEC’s forecast that oil demand growth this year would be slower than previously expected.
WTI futures slid below $89 a barrel after falling around 5% over the previous two sessions while Brent crude futures dipped to $94.37 per barrel.
More supply impacting oil prices
The market is faced with the prospect of rising supply as demand moderates. Libya is pumping more and Iran is edging closer to reviving a nuclear deal that will likely see higher crude flows, Bloomberg reported. Meanwhile, Saudi oil giant Aramco said the company is ready to ramp up output to its maximum capacity of 12 MMbbl/d by 2025 to meet world’s energy needs.
Higher output is expected from the US shale basins as well. On Monday, the US Energy Information Administration (EIA) said in its monthly report that it expects oil output in the Permian in Texas and New Mexico, the biggest US shale oil basin, to rise by 79,000 bbl/d to a record 5.408 million bbl/d in September.
Total output in the major U.S. shale oil basins will rise 141,000 bbl/d to 9.049 million bbl/d in September, the highest since March 2020, the statistical arm of the Department of Energy projected.
