Brent slips as OPEC+ eyes output increase

The front-month ICE Brent contract has plunged $2.76/bbl on the day from Friday, to trade at $77.21/bbl at 09.00 GMT.

PHOTO: Oil barrels. Getty Images

Upward pressure:

Brent’s price found modest support from the ongoing production outage in Libya. Oil production in the country has been hit due to conflicts over the leadership of Libya's central bank.

Libya’s state-owned oil company National Oil Corporation (NOC) confirmed on Friday that recent oilfield closures in the country have impacted about 63% of the country's total oil production, NOC said on social media platform X (formerly Twitter).

“Libyan supply disruptions continue,” two analysts from ING Bank noted, adding that this has contributed to upward pressure on oil prices.

In eastern Europe, Ukraine targeted Russia’s energy facilities with a barrage of drones over the weekend.

A fire broke out at the Moscow Oil Refinery in the Kapotnya district of Russia’s south-eastern region of Okrug yesterday, Moscow Mayor Sergei Sobyanin confirmed. Falling drone debris also caused a fire at a refinery situated at the Konakovo Power Station in the neighbouring Tver region.

The refinery in the Kapotnya district is owned by Gazprom Neft, the oil arm of the Russian gas giant, Reuters reported. These attacks have raised concerns about supply disruptions in the global oil market, which is already grappling with geopolitical conflicts in the Middle East and Libya.

Downward pressure:

Brent futures shed the previous week’s gains following reports that OPEC+ will likely begin unwinding its planned production cuts in October, Reuters reported citing six sources from the group.

In October, eight OPEC+ members are set to increase production by 180,000 b/d as part of the group’s plan to gradually bring its ongoing output cut of 2.2 million b/d back to the market.

“The catalyst for the [downward] move appears to be reports that OPEC+ members are leaning towards sticking to their plan and gradually unwinding cuts from October,” ING Bank’s analysts noted.

The group’s decision to roll back output might be due to the sudden halt in Libya’s production, market analysts said. “The group may believe that supply disruptions from Libya provide an opportunity to increase supply,” ING Bank’s analysts added.

By Aparupa Mazumder

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