AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights
- Oil prices hit a two-week low as Saudi Arabia signals a shift in production strategy.
- Australian oil stocks face pressure following declines in crude prices.
- Commodities such as gold, silver, and copper react positively to China's stimulus measures.
Oil prices experienced a significant drop on Thursday, reaching a two-week low. This decline was primarily attributed to a Financial Times report indicating that Saudi Arabia is prepared to abandon its $100-a-barrel price target while increasing production to reclaim market share. As a result, West Texas Intermediate crude fell to $67.44 a barrel, while Brent crude, the global benchmark, dipped to $70.80.
Despite intensified conflict in Israel and a major hurricane poised to make landfall in the southeastern United States, these events failed to halt the decline in oil prices. Earlier in the week, crude prices had surged following China’s announcement of an aggressive stimulus program, which was further supported by a statement from the Politburo, China's second-highest governing body.
The recent price slide is likely to exert pressure on ASX oil stocks, which struggled on Thursday. Woodside Petroleum (ASX:WPL) shares dropped by 2.4%, as investor sentiment waned regarding management's effectiveness. Santos Ltd (ASX:STO) also faced a decline of over 2% for similar reasons.
The primary catalyst for the recent decline is the anticipated production restoration by Saudi Arabia and seven other members of OPEC+. The group had previously delayed the unwinding of some production cuts, fueling speculation about a possible indefinite postponement. According to the Financial Times, Saudi Arabia is committed to resuming production by December 1, even if this decision results in lower prices.
Adding to the market pressure, reports indicated that factions in Libya have reconciled differences over the leadership of the country's central bank, which has historically impacted crude output levels.
In the broader commodities market, the news from China positively influenced precious metals. Gold prices reached $2,708.70 an ounce, while silver futures surpassed $32 an ounce. Additionally, copper futures climbed over 3%, finishing at $4.64 a pound, marking the highest level since May. These movements reflect a robust market response to China's stimulus announcements.
As market dynamics continue to evolve, stakeholders in the oil and commodities sectors remain attentive to geopolitical developments and production strategies.
