(Bloomberg) -- Oil slipped at the start of the fourth quarter as a bearish market outlook countered geopolitical risks in the Middle East.
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Brent traded near $71 a barrel after ending Monday modestly higher. Libya is preparing to restore output after its two rival governments reached a deal over leadership of the central bank, according to people familiar with the matter. Yet tensions persist in the Middle East, with Israel starting ground raids in Lebanon.
The global crude benchmark plunged almost 17% last quarter, and is now lower year-to-date. Prices have been dragged down by expectations that OPEC+ will make good on plans to bring back production, as well as a slowdown in China.
“I assume today’s weakness is driven by stop-loss selling from traders once again trying to buy the geopolitical event,” said Ole Hansen, head of commodities strategy at Saxo Bank. “Instead, a much more tangible production increase from Libya remains the focus.”
OPEC+ will hold an online monitoring meeting Wednesday to assess the market as the alliance prepares to ramp up output. The group will start restoring supply in December and isn’t discussing any new proposals, Russian Deputy Prime Minister Alexander Novak said last week.
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