Brent crude approached the USD 71 per barrel mark and is down by more than 4% for the week, while West Texas Intermediate is trading above USD 67. According to the Financial Times, reports on Thursday indicated Saudi Arabia’s commitment to higher production.

Oil prices declined sharply for a second consecutive day, leading to a significant decrease for the week. The potential for increased supply from the Organization of the Petroleum Exporting Countries (OPEC) members Saudi Arabia and Libya prompted this drop.

In addition, conflicting Libyan groups agreed to nominate a new central bank governor, which could help resolve a dispute that has led to a reduction in oil production.

Crude oil is poised for a second consecutive quarterly decline, as OPEC+ plans to ease voluntary supply restrictions and concerns about China’s economic outlook are exerting pressure on futures.

Although China introduced several monetary and fiscal stimulus measures this week, their impact remains uncertain despite their aid to stocks and other commodities.

This week has seen significant fluctuations in futures, resulting in higher implied volatility for Brent. Options markets are currently indicating a reduced risk of future price spikes, as the premium of bearish puts over bullish calls for Brent widened again on Thursday.

The recent sell-off has occurred despite ongoing tensions in the Middle East. Israel has declared its intention to continue its attacks on Hezbollah targets in Lebanon indefinitely, undermining efforts to secure a cease-fire and reduce the risk of a regional conflict.

In other news, Hurricane Helene intensified into a Category 4 storm approaching Florida’s west coast. Forecasters are predicting severe rainfall, flash flooding, and widespread power outages.

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