Oil prices have fallen to their lowest point in more than five months, driven by concerns over excess supplies. This decline occurred despite a report indicating a reduction in US inventories.
The US benchmark, West Texas Intermediate (WTI), saw a drop of more than 4%, falling below US$70 a barrel for the first time since June 29.
Similarly, the global benchmark Brent decreased by 3.8%, slipping under US$75.
Increasing global supplies
The downturn in oil prices is attributed to signs of increasing global supplies, says the AFR
Ship-tracking firms have estimated that American crude exports are approaching a record high of nearly 6 million barrels per day.
Despite the Organisation of Petroleum Exporting Countries (OPEC) and its allies announcing deeper output cuts to stabilise the market, traders remain skeptical about the cartel's adherence to these curbs.
Even a report from the US Government, which showed a decrease of 4.63 million barrels in the country's crude stockpiles, did not halt the decline in oil prices.
Traders are also dismissing data from the Energy Information Administration about a decline in US crude exports, citing a significant adjustment factor.
What are countries doing?
Reflecting the market's weakness, Saudi Arabia has reduced its official selling prices to Asia significantly, the most substantial cut since February.
Russian Deputy Prime Minister Alexander Novak mentioned that OPEC+ might implement additional measures if the recent agreement fails to balance the market.
Russian President Vladimir Putin's visit to the UAE, which includes discussions on oil with regional leaders, underscores the ongoing efforts to address the market dynamics.