Oil prices tumble 3% on prospect of more OPEC+ oil
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The news: Oil prices fell more than 3% on Thursday after the Financial Times reported that Saudi Arabia is preparing to abandon its price target of USD100 ($145) per barrel of crude, ahead of raising output in December.
The numbers: Brent crude futures settled down USD1.86, or 2.53%, to USD71.60 a barrel on Thursday. US West Texas Intermediate crude finished down USD2.02, or 2.9%, at USD67.67 per barrel.
Brent was down to USD70.89 by 8:30am AEST, with WTI lower at $67.51.
The fall follows the FT's report, citing people familiar with the matter, that the world's top crude exporter Saudi Arabia is preparing to give up its unofficial price target of USD100 a barrel for crude as it gets ready to increase output.
The context: Two sources from the Organization of the Petroleum Exporting Countries and allies led by Russia, together known as OPEC+, told Reuters that the group is set to go ahead with a December oil output increase.
The sources noted that its impact will be small should a plan for some members to make larger cuts to compensate for overproduction be delivered in September and later months.
Meanwhile, the announcement of a new Chinese stimulus package limited further losses. Top government officials in China, the world's largest crude oil importer, pledged “necessary fiscal spending” to meet the country’s 5% growth target, raising expectations for fresh stimulus on top of recent measures.
The sources: Reuters, Financial Times
