Oil Prices Continue to Decline Amid Expectations of Increased Global Supply
Oil prices continued their decline for the second consecutive session on Tuesday, affected by traders' concerns over increasing global supply with the resumption of crude oil exports from the Kurdistan region of Iraq and expectations of increased production by the "OPEC+" alliance.
Brent crude futures for November delivery fell by 0.6%, settling at $67.53 per barrel, while U.S. West Texas Intermediate crude dropped 0.3% to $63.10 per barrel. This performance followed significant losses recorded by both crude types on Monday, exceeding 3%, marking the largest daily decline in months.
Analysts suggest that this decline reflects market fears of more oil flowing into global markets. Tony Sycamore, an analyst at "IG", commented: "The drop in prices was due to the resumption of crude exports from the Kurdistan region of Iraq, along with expectations that the OPEC+ alliance will agree to a new increase in production for November during its upcoming meeting next week."
The market is facing renewed pressure with reports from three informed sources confirming that the "OPEC+" alliance is likely to approve an increase in production of no less than 137,000 barrels per day during its scheduled meeting next Sunday.
On the other hand, markets have seen the beginning of crude oil flow through the pipeline from the Kurdistan region of northern Iraq to Turkey for the first time in two and a half years, following a temporary agreement that ended the stalemate, according to the Iraqi Ministry of Oil.
Despite these downward factors, markets remain in a state of anticipation and caution, balancing concerns over supply abundance against supply disruptions caused by Ukrainian attacks on Russian refineries, in addition to challenges related to weak global demand.
In a comment reflecting this state of unease, Ed Muir, an analyst at "Marex", stated that "OPEC+ is already pumping less than its allocated share, yet markets do not seem comfortable with the prospect of more oil flowing into the market."
