Brent crude futures declined 20 cents, or 0.28%, to $71.40 per barrel
Oil prices eased for a third day on Friday and were on track to drop for the week as investors focused on expectations of increased output from Libya and the wider OPEC+ group, although fresh stimulus from top importer China limited losses.
Brent crude futures declined 20 cents, or 0.28%, to $71.40 per barrel as of 0433 GMT.
On a weekly basis, Brent crude was set to decline 4%, while WTI was on track to drop 6%.
Though investors across asset classes cheered after Chinese authorities finally released bolder stimulus, oil markets appear fixated on Libya and OPEC this week, according to Priyanka Sachdeva, senior market analyst at Phillip Nova.
The recent decision by OPEC+ to ramp up production has only added to the gloom, said Sachdeva, adding that the oil market has been struggling with weakening demand over the last few months.
While it is uncertain whether Chinese stimulus will translate into higher fuel demand, it may still offer some respite to the oil market, she said.
China’s central bank on Friday cut interest rates and injected liquidity into the banking system as Beijing ramps up stimulus to pull economic growth back towards this year’s almost 5% target and fight deflationary pressures.
More fiscal measures are expected to be announced before China’s holidays starting on October 1, after a meeting of the Communist Party’s top leaders showed an increased sense of urgency about mounting economic headwinds.
Meanwhile, rival factions staking claims for control of the Central Bank of Libya signed an agreement to end their dispute on Thursday. The dispute had caused a sharp reduction in oil production and exports in the country, with crude exports down to 400,000 bpd this month, from more than 1 million barrels last month.
The agreement could see more than 500,000 barrels per day of Libyan supply return to markets, ANZ Bank analyst Daniel Hynes said.
Separately OPEC+ is currently cutting oil output by a total of 5.86 million barrels per day but plans to reverse 180,000 barrels per day of those cuts in December.
