09/03/2024 – 18:01
Oil prices fell nearly 5% on Tuesday to their lowest levels in nearly nine months amid signs of a deal to resolve a dispute that has disrupted Libya’s oil production and exports.
+ Dollar rises again and closes at R$5.64; Ibovespa falls, despite GDP above expectations
Brent crude futures settled down $3.77, or 4.9%, at $73.75 a barrel, their lowest level since Dec. 12.
West Texas Intermediate (WTI) crude futures fell $3.21, or 4.4%, to $70.34 – also the lowest since December.
Brent closed down 0.3% last week, while WTI closed down 1.7%.
Libya’s legislative bodies have agreed to appoint a new central bank governor within 30 days following UN-sponsored negotiations, according to a statement signed by representatives of the bodies on Tuesday.
Libya’s oil exports from major ports were halted on Monday and production was cut across the country, six engineers told Reuters, continuing a standoff between rival political factions over control of the central bank and oil revenues.
Libya’s National Oil Corp (NOC) has declared force majeure at its El Feel oilfield effective September 2.
Total output fell to just over 591,000 barrels per day (bpd) on Aug. 28 from nearly 959,000 bpd on Aug. 26, the NOC said. Output was at about 1.28 million bpd on July 20, the company said.
Ahead of news that more Libyan supply was likely to return to the market, prices had fallen on expectations that demand was being hurt by slow economic growth in China, the world’s biggest oil importer.
“The weaker-than-expected Chinese manufacturing PMI over the weekend likely exacerbated concerns about the performance of the Chinese economy,” said Charalampos Pissouros, senior investment analyst at brokerage XM.
AI to weigh on prices in next decade, says Goldman Sachs
Artificial intelligence could affect oil prices over the next decade by boosting supply and reducing consumption of the commodity, Goldman Sachs said on Tuesday.
The impact of AI on the oil and metals industry has been largely on the demand side, given the expected increase in energy consumption by the computers that process the technology.
“AI can potentially reduce costs through better logistics and resource allocation… resulting in a $5 drop in the price per barrel, assuming a 25% productivity gain observed for early adopters of AI,” Goldman Sachs said in a report.
Goldman expects AI to generate a modest increase in oil demand compared to its impact on power and natural gas demand over the next 10 years.
“We believe AI is likely to have a modest net negative impact on oil prices in the medium to long term, as the negative impact on the cost curve (around $5 a barrel) is likely to outweigh the increase in demand (around $2 a barrel),” Goldman said.
According to Goldman Sachs estimates, about 30% of the costs of a new shale well could be reduced by AI. Furthermore, an AI-induced 10% to 20% increase in low recovery factors in US shale could increase oil reserves by 8% to 20% (10 billion to 30 billion barrels).
Brent crude futures fell $3.51, or 4.5%, to $74.02 a barrel, the lowest level since December. West Texas Intermediate crude futures fell $2.97, or 4.1%, to $70.58, the lowest since January.
US tech companies are seeking energy assets held by bitcoin miners to secure a supply of electricity for their artificial intelligence and cloud computing processing centers.
#Oil #prices #hit #yearlow #drop #Tuesday
