Oil prices slide on prospects Saudi Arabia to raise output

Crude oil futures are tumbling Thursday following reports that OPEC+ will move ahead with a planned increase in oil production in December, and that Saudi Arabia was set to abandon its unofficial $100/bbl oil price target as it prepares to raise output in an effort to take back market share.

Saudi Arabia and seven other OPEC+ members previously agreed to push back the unwind of some production cuts from October to December, sparking speculation the increase could be postponed indefinitely, and Financial Times reports that Saudi is committed to resuming that production on December 1 even if it leads to a period of lower prices.

Prices also are under pressure on expectations for a production boost in Libya, after factions in the country reached a deal to appoint a new central bank governor.

“The prospect of additional supply from Libya and Saudi Arabia has been the main driver behind the latest weakness,” Saxo Bank analyst Ole Hansen said.

Front-month November Nymex crude (CL1:COM) -3.3% to $67.38/bbl, and November Brent crude (CO1:COM) -3.1% to $71.20/bbl.

ETFs: (NYSEARCA:USO), (BNO), (UCO), (SCO), (USL), (DBO), (DRIP), (GUSH), (USOI), (XLE), (XOP)

Energy stocks comprise 12 of the 15 biggest losers on the S&P 500: Diamondback Energy (FANG) -4.5%, Targa Resources (TRGP) -4.3%, Baker Hughes (BKR) -3.8%, ONEOK (OKE) -3.5%, Halliburton (HAL) -3.3%, APA Corp. (APA) -3%, Devon Energy (DVN) -2.7%, ConocoPhillips (COP) -2.3%, Marathon Oil (MRO) -2.3%, SLB (SLB) -2.3%, EOG Resources (EOG) -2.1%, Exxon Mobil (XOM) -2%.

News of more stimulus moves from China may limit further losses, as the Politburo said the country will deploy “necessary fiscal spending” to meet this year’s 5% economic growth target.