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on wednesday (august 28th) eastern time, the energy information administration (eia) of the u.s. department of energy released its weekly oil inventory report, showing that as of the week of august 23, u.s. eia crude oil inventories decreased by 846,000 barrels from the previous week to 425.2 million barrels, marking two consecutive weeks of decline. total inventories hit a new low since january this year.

last week, eia crude oil inventories in cushing also fell by 668,000 barrels from the previous month to the lowest level since november last year. at the same time, on monday (26th), the northeastern libyan government stopped all local crude oil production and exports, causing libya's oil production to drop by more than half this week, from 1 million barrels/day to about 450,000 barrels/day. it is estimated that libya's suspension of production will lead to a reduction of nearly 1 million barrels/day in global crude oil supply.

after the data was released, the decline of international crude oil narrowed on wednesday, with wti crude oil rising above $75 per barrel and brent crude oil almost erasing its intraday decline. at noon today, brent crude oil and us crude oil fell slightly again, closing at $77.83 per barrel and $74.70 per barrel respectively.

amid falling u.s. inventories and libya's shutdown, the market is more concerned about whether the organization of the petroleum exporting countries (opec) will increase production later this year. a survey of traders, analysts and refiners showed that 12 respondents expected that saudi arabia, russia and other opec+ countries would gradually withdraw from the production cuts as previously planned from october, increasing their holdings by 543,000 barrels per day in october, 11 respondents expected a delay in the increase in production, and another 5 expected a partial increase in production, or depending on the libyan shutdown.

despite the recent decline in inventories, international oil prices have fallen by more than 10% since early july. analysts from citi, rystad energy and bnp paribas all expect that opec+ may not increase supply as previously planned because the current oil price is too low for opec+ countries to cover the spending of their governments.

ole hansen, head of commodity strategy at saxo bank in denmark, said that if libya's production suspension is prolonged, it could pave the way for opec+ countries to start increasing production, but it is not expected to have much impact on oil prices and market sentiment.

in fact, even though inventories have declined, due to weak demand, wall street institutions such as goldman sachs and morgan stanley have recently lowered their expectations for international oil prices.

in a research report this week, goldman sachs' team of analysts lowered their forecast for the average price of brent crude oil in 2025 from $82 per barrel to $77 per barrel. the bank's analysts believe that opec+ may decide to increase production, which may "strategically constrain supply from non-opec countries." based on this, "oil prices may be significantly lower than expected in the short term, especially if opec strategically suppresses the development of us shale oil more forcefully, or if the global economic recession leads to a further reduction in oil demand."

coincidentally, morgan stanley also recently lowered its oil price forecast, lowering its fourth-quarter oil price forecast from $85 to $80, and predicting that oil prices will further drop to $75 per barrel by the end of 2025. the reason given by morgan stanley is also that against the backdrop of weak global demand, supply from opec and non-opec oil-producing countries is expected to increase.

however, jeff currie, a former well-known commodities analyst at goldman sachs and current chief energy strategy officer of carlyle group, disagreed with his former employer, predicting that arbitrage funds will flow back into the crude oil market, increasing the risk of oil prices rising. he analyzed that previously, high interest rates prompted hedge funds and participants in the physical crude oil market to cut $100 billion in futures positions and crude oil inventories and invest in the u.s. money market instead. next, with the fed's interest rate cuts, the cost of holding crude oil inventories will decrease, whether in the form of physical assets or financial assets, and the crude oil market will also see a situation similar to the reversal of the yen arbitrage transaction at the beginning of this month, and oil prices will rise accordingly.

he added that if there were also severe oil supply disruptions, it would intensify short covering and amplify the reversal in the crude oil market.