08:45 AM EDT, 09/26/2024 (MT Newswires) -- Oil moved sharply lower early on Thursday following a report that said OPEC+ will begin to return 2.2-million barrels per day of voluntary production cuts to market as Saudi Arabia, the group's leader, abandons its US$100 per barrel price target to regain market share, while Libya's two squabbling governments reached an agreement that should see its exports rise.

West Texas Intermediate crude oil for November delivery was last seen down US$2.04 to US$67.65 per barrel, while November Brent crude, the global benchmark, was down US$2,06 to US$71.40.

The Financial Times on Thursday reported that Saudi Arabia is ready to abandon its official price target and is prepared for a period of lower oil prices as OPEC+ closes in on returning voluntary cuts to market in December, citing people familiar with the country's thinking.

The reports notes the new policy is a major shift to the Saudi policy of cutting supply to maintain high prices, as the Kingdom's restraint has given room for U.S., Canadian and South American producers to increase their output, while some of OPEC+'s own members routinely violate their quotas.

The policy is "a major shift in thinking from the de-facto leader of OPEC, who, since November 2020, has led other OPEC+ members in repeatedly cutting output to support stable and high prices. While stability, until recently, was successfully achieved, the higher price target has failed, not least due to a major slump in China's oil demand growth, down from around 1.3 million barrels a day in 2023 to less than 200,000 barrels a day in 2024", Ole Hansen, head of commodity strategy at Saxo Bank noted.

An agreement between Libya's two ruling factions is also weighing on prices. The two competing governments reached an agreement on an interim governor for the country's central bank, Bloomberg reported. The agreement could see the North African country's production return to above one-million bpd from around 450,000 bpd currently as blockades are lifted.

Tightening U.S. supply may offer some support to prices, as Hurricane Helen moves through the Gulf of Mexico ahead of landfall near the city of Tallahassee, Florida, late on Thursday. In a report issued midday on Wednesday, the U.S. offshore regulator said 511,000 bpd of production, 29% of the gulf's total had so far been shut in ahead of the storm.