Saudi Arabia's strategic shift sparked oil price drop as Middle East production rises

Oil prices dropped more than 3% on Thursday, September 26, following a report on Saudi Arabia's plan to abandon its $100/barrel price target. The move comes as oil production in the Middle East is set to increase, supported by the newly appointed Libyan governor, whose leadership is expected to revive the nation's oil output.

Brent crude fell by $1.86, closing at $71.60/barrel.

WTI dropped by $2.02, settling at $67.67/barrel.

The International Energy Agency (IEA) has projected that global oil markets will be oversupplied next year, regardless of additional OPEC+ output, due to surging production from countries outside the group. However, the impact of the price decline was mitigated by China's recent announcement stimulus package, as well as forecasts of Hurricane Helene potentially moving toward Florida's west coast, which could disrupt oil supplies.

Written by: Muhammad Hafiz