Oil prices fell on Thursday, reversing earlier gains as news hit the market that top exporter Saudi Arabia had abandoned its crude price target as it prepares to increase production.
Brent crude futures fell 55 cents, or 0.75%, to $72.91 a barrel, while WTI crude was down 55 cents, or 0.79%, at $69.14 a barrel by 05:02 GMT.
Saudi Arabia is set to abandon its unofficial $100-a-barrel price target for crude as it prepares to increase production.
Oil prices had risen slightly earlier in the session as signs of increasing fuel demand and falling inventories in the United States, the world’s largest consumer of crude, overshadowed concerns about global demand prospects, particularly in China.
In China, fiscal stimulus is likely needed to revive household consumption, along with easing measures announced this week on Tuesday.
Signs that Libyan oil is returning to the market are weighing on prices. Any recovery in Libyan production would be a blow to a market already struggling with concerns about weak demand in the United States and China.
The market is not paying much attention to data showing stronger demand in the United States, with the Energy Information Administration (EIA) reporting last week that U.S. oil inventories fell more than expected overall.
Gasoline demand rose above 9 million barrels per day (bpd) last week, while distillate supplies rose above 4 million bpd, according to EIA data.
Markets are expected to focus on month-end positioning for the rest of the week. The focus will then be on nonfarm payrolls figures next Friday, with a keen eye on events in the Middle East given weak consumer confidence figures earlier in the week.
A survey on Tuesday showed U.S. consumer confidence fell by the most in three years in September amid growing fears about the labor market.
The U.S. nonfarm payrolls report is due on Oct. 4.
The U.S., France, and several allies have called for an immediate 21-day ceasefire on the Israel-Lebanon border after intense discussions at the United Nations, while also voicing support for a ceasefire in Gaza.
Israel’s military chief said a ground offensive was possible, raising fears that the conflict could trigger a wider war in the Middle East’s key oil-producing region.
