Skip to main content

Oil prices slip over Libyan production, OPEC cuts

The recovery of the North African country's output has complicated OPEC's efforts to curb supply Photograph: (Reuters)

Reuters Tokyo, Japan Aug 08, 2017, 07.55 AM (IST)

Oil prices slipped 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 drag.

Global benchmark Brent crude futures were down 11 cents, or 0.2 per cent, at $52.26 a barrel at 0629 GMT, after dipping 0.1 per cent in the previous session.

US crude futures were down 7 cents, or 0.1 per cent, at $49.32 a barrel, having fallen 0.4 per cent 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 Organisation of the Petroleum Exporting Countries (OPEC) and other big producers like Russia.

The recovery of the North African country's output has complicated OPEC's efforts to curb supply, fuelling doubts over the effectiveness of the production cuts. Libya churned out 1.03 million bpd in July, according to the latest Reuters survey.

OPEC output hit a 2017-high in July and its exports marked a record.

Still, Saudi Arabia, the world's biggest oil exporter, plans to cut supplies to most buyers in Asia by as much as 10 per cent in September, sources told Reuters on Tuesday. Asian buyers have been mostly shielded from the cuts until now.

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, oil's 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 release 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.

Elsewhere, crude oil imports to China for the January to July period rose 13.6 per cent from the year ago period to 247 million tonnes, customs data showed on Tuesday.

Show Comments
  • delete