U.S. Oil Futures Settle Lower

U.S. oil futures settled lower on Wednesday despite ongoing hopes that major producers will continue to limit supply in a bid to offset concerns about demand growth.

At 19:30 EST (13:30 GMT), Crude Oil WTI Futures fell 1.6%, settling at $69.20 a barrel, while Brent Oil Futures decreased by 1.4%, settling at $72.70 a barrel.

OPEC+ May Delay Planned Output Hike

The Organization of Petroleum Exporting Countries and its allies (OPEC+) are considering a postponement of a planned output increase next month, according to Reuters sources.

Eight OPEC+ members are scheduled to raise output by 180,000 barrels per day (bpd) in October as part of an unwinding plan for their recent output cuts of 2.2 million bpd. However, market volatility due to oil facility shutdowns in Libya and a poor demand outlook have raised concerns within the group, with some suggesting a delay is “highly possible.”

Potential End to a Dispute in Libya

Both oil benchmarks dropped over 4% during the previous session, reaching their lowest levels since mid-December. This followed news of a potential resolution to a dispute in Libya that halted the country’s crude production and exports.

Libya’s legislative entities have agreed to appoint a new central bank governor within 30 days following United Nations-sponsored talks. This development raised hopes of resolving the political deadlock that has disrupted Libya’s oil exports.

On Monday, major Libyan ports ceased exports, and production plummeted due to rival factions’ standoff over the central bank and oil revenue access. The National Oil Corporation (NOC) reported a dramatic decline in total production to just over 591,000 bpd, down from nearly 959,000 bpd two days earlier, and significantly lower than approximately 1.28 million bpd on July 20.

Demand Growth Worries Weigh

Additionally, sentiment was negatively impacted by weak U.S. manufacturing activity data, heightening fears that the world’s largest economy could face a hard landing or recession.

Concerns regarding economic slowdowns in China, Europe, and the U.S. have long weighed on the crude market, with some traders anxious that central banks, especially the Federal Reserve, have maintained high-interest rates for too long while tackling inflation.

Weekly U.S. inventory data was delayed due to Monday’s Labor Day holiday. The American Petroleum Institute report is expected later, with data from the Energy Information Administration scheduled for release on Thursday.

(Peter Nurse, Senad Karaahmetovic contributed to this article.)