Oil prices fell on Wednesday, weighed down by concerns of oversupply as Libyan output improves and as U.S. gasoline inventories rose despite the peak summer driving season.
Brent crude futures, the international benchmark for oil prices, were at $51.64 per barrel at 0721 GMT, down 23 cents, or 0.4 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were at $47.59 a barrel, down 24 cents, or 0.5 percent.
Libya’s Sharara oil field, the country’s largest, was gradually restarting on Tuesday after a shutdown, although instability in the country means that output there could be volatile, traders said.
Sharara recently reached output of 280,000 barrels per day (bpd), but closed earlier this week due to a pipeline blockade. Its production is key to Libya’s oil output, which surged above 1 million bpd in late June, about four times its level last summer.
Libya’s rising output is a headache for the Organization of the Petroleum Exporting Countries (OPEC), which together with non-OPEC producers including Russia has pledged to hold back around 1.8 million bpd of supplies between January this year and March 2018 to tighten supplies.
However, OPEC has so far fallen short of its pledge, in part due to Libya’s strong output. The OPEC-member has been exempt from cuts.
“Sentiment towards oil remains bearish amid oversupply fears and the possible threat of OPEC’s supply cut deal falling apart,” said Lukman Otunuga, analyst at futures brokerage FXTM.
The next meeting of a ministerial committee of OPEC and non-OPEC states to discuss their production pact has been proposed for Sept. 22.
For Quick Trial – 8962000225 ✔
✆ – 0731-6626222 | Toll Free – 1800-3010-2007 ✔
Give a Missed Call for Free Trial – 09699997717 ✔