Oil prices dropped on Thursday on a report that Saudi Arabia, one of the largest crude producers globally, is giving up its crude oil price target and increase output. 

As of 11:45 a.m. India time, Brent crude futures were down 2.23 percent to $71.82 a barrel, while US West Texas Intermediate (WTI) crude declined by 2.22 percent to $68.14 per barrel. 

Financial Times, citing people familiar with the matter reported that the Kingdom is preparing to abandon its unofficial price target of $100 a barrel for crude as it prepares to increase output. 
Another factor which played a crucial role in decreasing oil prices was the sign of the return of Libyan oil to the market. 

Delegates from divided Libya's east and west had agreed on the process of appointing a central bank governor, a step which could help resolve the crisis over control of the country's oil revenue that has disrupted exports, Reuters reported. 

29% of crude production shut in Gulf of Mexico

Meanwhile, Reuters reported that 29 percent of the crude production and 17 percent of the natural gas output were shut in the Gulf of Mexico due to fears of hurricane Helene. 

The U.S. National Hurricane Center had previously warned that Helene could result in strong winds speeding at 130 kilometers per hour. 

Earlier this week, energy giants including BP and Shell had announced that they are halting operations in the Gulf of Mexico, ahead of the potential storm. 

Trinidad selects Shell as preferred bidder for shallow water block

In another major development, Reuters reported that Trinidad and Tobago selected oil and gas producer Shell as the preferred bidder for a shallow water block in the country. 

Citing people familar with the matter, the news agency reported that Shell had beaten out bids from BP and EOG Resources. 

"Shell is in negotiations with the government on terms for working on the Modified U(c) block, the most contested of 13 areas offered by the Caribbean country's government in a shallow water auction last year," according to Reuters report.