<body><div><figure><img src="https://img.particlenews.com/image.php?type=thumbnail_580x000&amp;url=2pE1rv_0vkaQqlW00" alt="https://img.particlenews.com/image.php?url=2pE1rv_0vkaQqlW00" width="1200" height="675" ></figure>Representatives of Capex.com Middle East and Skandinaviska Enskilda Banken take a look at the oil price. Oil prices continued to drop on Thursday as Saudi Arabia might shift away from its unofficial price target for crude in anticipation of increased output.That’s what George Pavel, General Manager at Capex.com Middle East, said in a market analysis sent to Rigzone on Thursday, adding that “this move dampened market sentiment, overshadowing positive signs from stronger U.S. fuel demand and decreased oil inventories”.“Moreover, concerns about global demand, particularly in China, along with the possible return of Libyan oil to the market, further pressured prices,” Pavel added.“While China has introduced some easing measures, further fiscal stimulus may be needed to support household spending and stimulate economic growth,” Pavel continued.In the analysis, Pavel said the broader outlook for the oil market remains uncertain due to weak demand from major global economies and noted that geopolitical tensions in the Middle East have further heightened concerns of a potential conflict that could disrupt oil production.“However, a ceasefire could wait on the market,” Pavel stated in the analysis.“This uncertainty poses a significant risk to crude prices, as any disruption in supply from this critical region could trigger a price spike,” he added.“However, with demand still lagging globally, the market may struggle to find stability, leading to potential volatility in crude prices,” he continued.“Looking ahead, market participants will closely monitor key U.S. economic data that could influence crude prices,” Pavel went on to state.Pavel noted in the analysis that the U.S. GDP is projected to grow by three percent in the second quarter compared to 1.4 percent in the first quarter. He warned, however, that “if the actual figures fall short of expectations, it could further weigh on oil prices”.In a Skandinaviska Enskilda Banken AB (SEB) report sent to Rigzone on Thursday, Ole R. Hvalbye, a Commodities Analyst at the company, said, “Brent crude prices have dropped by roughly $ 2 per barrel … following Saudi Arabia’s shift towards prioritizing production volume over price”.“The Brent price initially tumbled by nearly $3 per barrel, reaching a low of $70.7 before recovering to $71.8,” he added.“The market is reacting to reports suggesting that Saudi Arabia may abandon its unofficial $100 per barrel target to regain market share, aligning with plans to increase output by 2.2 million barrels per day starting in December 2024,” he continued.“This move, while not yet officially confirmed, signals a stronger commitment from Saudi Arabia to boost supply, despite market expectations that they might delay the increase if prices remained below $80,” per barrel, he went on to note.In the report, Hvalbye stated that, if confirmed by the Saudi Energy Ministry, further downward pressure on prices is expected, as the market is already pricing in this potential increase.“For months, the market has been skeptical about whether Saudi Arabia would follow through with the production increase, but the recent rhetoric indicates that the Kingdom may act on its initial plan,” he said in the report.“The decision to increase production is likely motivated by a desire to regain market share, especially as OPEC+ continues to carefully manage output levels,” he added.Hvalbye noted in the report that the easing of geopolitical tensions between Israel and Hezbollah has also contributed to the recent price dip, “with hopes for a potential ceasefire easing regional risk concerns”.“Additionally, uncertainty persists around the impact of China’s monetary easing on future demand growth, adding further downward pressure on prices,” he added.Rigzone has contacted the Saudi Arabian Energy Ministry for comment on Pavel and Hvalbye’s statements. At the time of writing, the energy ministry has not yet responded to Rigzone’s request.To contact the author, email andreas.exarheas@rigzone.com</div></body>

Mountain View, CA

NewsBreak

Oil Prices Continue to Drop

Representatives of Capex.com Middle East and Skandinaviska Enskilda Banken take a look at the oil price. Oil prices continued to drop on Thursday as Saudi Arabia might shift away from its unofficial price target for crude in anticipation of increased output. That’s what George Pavel, General Manager at Capex.com Middle...