Oil prices dropped on Thursday, reversing earlier gains, as news of top exporter Saudi Arabia giving up its crude oil price target in preparation for expanded production weighed on the market.
Brent crude futures were down 55 cents, or 0.75%, to $72.91 a barrel, while U.S. West Texas Intermediate crude fell 55 cents, or 0.79%, to $69.14 per barrel as of 0502 GMT.
Saudi Arabia is preparing to abandon its unofficial price target of $100 a barrel for crude as it prepares to increase output, the Financial Times reported on Thursday, citing people familiar with the matter.
Oil prices had edged higher earlier in the session, as signs of firmer fuel demand and falling inventories in the United States, the world’s top crude oil consumer, eclipsed worries over global demand prospects, particularly in China.
“With regards to China, on top of this week’s easing measures announced on Tuesday, fiscal stimulus is likely required to boost household consumption and to reignite flagging animal spirits,” said Tony Sycamore, market analyst at IG.
