LONDON: Oil prices fell more on Tuesday on expectations that a well-supplied market would be able to absorb disruptions that have cut Libya’s crude production to a trickle.
Brent crude was down 37 cents at $64.83 a barrel by 1450 GMT, having hit a session low of $64.06. US West Texas Intermediate crude was down 20 cents at $58.34, after hitting a low of $57.68 earlier in the day.
“Market participants appear to fret less about supply disruptions in the Middle East, or at least the risk of disruptions, thanks to the impressive growth we have seen in US output over recent years,” Bank ING said.
Almost all of Libya’s crude export capacity is now under force majeure — a waiver on contractual obligations — after pipeline blockades in the east and west of the country hindered oil production.
If Libyan exports are halted for any sustained period, storage tanks will fill within days and production will slow to 72,000 barrels per day (bpd), said a spokesman for state oil company NOC. Libya has been producing about 1.2 million bpd recently.
Anti-government unrest in Iraq, another major oil producer, also supported oil prices initially, but officials later said output from southern oilfields has been unaffected by the unrest.
Published in Dawn, January 22nd, 2020