Oil prices fall further as Libyan field resumes production
TOKYO (Reuters) – Oil prices slipped further in Asian trading on Tuesday following a recovery in output at Libya’s largest oil field and as doubts about OPEC-led production cuts continue to weigh on the market.
Global benchmark Brent crude futures were down 23 cents, or 0.4 percent, at $52.14 a barrel at 0244 GMT after dipping 0.1 percent in the previous session. US crude futures were down 18 cents, or 0.4 percent, at $49.21 a barrel, having fallen 0.4 percent on Monday.
Production from Libya’s 270,000 barrels-per-day (bpd) Sharara field was returning to normal after a brief disruption when armed protesters broke into a control room in the coastal city of Zawiya, the National Oil Corporation (NOC) said on Monday.
Libya was exempted from a push to cut global production and bolster oil prices led by the Organization of the Petroleum Exporting Countries (OPEC) and other big producers like Russia.
The recovery of the North African country’s output has complicated the OPEC’s efforts to curb supply, fuelling doubts over the effectiveness of the output cuts. Libya produced 1.03 million bpd in July, according to the latest Reuters survey.
OPEC output hit a 2017 high in July and its exports hit a record.
Officials from a joint OPEC and non-OPEC technical committee are meeting in Abu Dhabi on Monday and Tuesday to discuss ways to boost compliance with the deal to cut 1.8 million barrels per day in production.
“Assuming that nothing comes from OPEC/Non-OPEC’s technical meeting in Abu Dhabi today, oils near term fate will most likely be determined by the official US Department of Energy inventory data tomorrow evening Asia time,” said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore.
The US Energy Information Administration, part of the Energy Department, will releases its weekly petroleum status report at 1430 GMT on Wednesday, giving details on stockpiles and refinery runs.
US crude inventories were expected to post their sixth straight weekly decline last week, while refined product stockpiles likely fell too, a preliminary Reuters poll showed on Monday.
Later on Tuesday the American Petroleum Institute, will release its own report on stockpiles and refinery throughput.
Oil output in the United States has remained high, although Baker Hughes data on Friday showed a cut of one drilling rig in the week to Aug. 4.
Crude oil imports to China for the January to July period rose 13.6 percent from the year ago period to 247 million tonnes, data from the General Administration of Customs showed on Tuesday.