Oil Prices Rebound After Saudi Supply Shock... WTI Up 0.75%

Rebound in One Day... Price at $71.98 per Barrel
Saudi Arabia to Increase Production to Regain Market Share
Supply Pressure and US Hurricane 'Helen' Among Variables

Oil prices, which had plunged on news that Saudi Arabia would increase oil production starting in December, rebounded slightly within a day as bargain buying entered the market.

On the 27th (local time) at the New York Mercantile Exchange, the near-month November delivery West Texas Intermediate (WTI) crude oil closed at $68.18 per barrel, up $0.51 (0.75%) from the previous trading day. The global benchmark Brent crude for November delivery closed at $71.98 per barrel, up $0.38 (0.53%) from the previous session.

Although prices rebounded on the day, oil prices closed lower over the past week. WTI recorded a weekly decline of 3.97%. Due to this week's drop, New York crude failed to achieve a three-week consecutive rise.

The oil market reacted sensitively to Saudi Arabia's production increase. This week, Israel carried out airstrikes targeting the Lebanese militant group Hezbollah, and China, the world's largest oil importer, announced a large-scale monetary stimulus. However, news that Saudi Arabia would proceed with its planned production increase starting in December absorbed all these factors.

The Saudi government plans to increase oil production from December this year to regain market share. Initially, the Organization of the Petroleum Exporting Countries (OPEC) and the major oil-producing countries' coalition 'OPEC+' were scheduled to lift the long-standing production cuts starting in early October. However, the lifting was postponed by two months, moving the production increase to early December, and Saudi Arabia has decided not to delay this again. Previously, Libya was also expected to resume oil production halted due to internal conflicts, and with Saudi Arabia deciding to increase production, supply pressure is strongly weighing on oil prices.

The market is also closely watching whether Hurricane 'Helen' making landfall in the southeastern United States will affect oil prices. According to the National Hurricane Center, Helen's landfall is likely to cause prolonged power outages and flooding in the southeastern U.S., which could significantly impact fuel demand.