SINGAPORE: Brent crude fell below $109 a barrel on Wednesday as Libya restarted an oilfield, on track to drop for an eighth session in what would be its longest losing streak in over four years.
Easing worries over possible disruptions to supply from the conflict in Iraq also dragged on prices. August Brent crude had declined 12 cents to $108.82 a barrel by 0318 GMT, down nearly 6 percent from a nine-month high reached in June.
US crude for August delivery was up 3 cents at $103.43 a barrel, after Tuesday's settlement marked its longest losing run since December 2009.
The price spread between the two benchmarks is the narrowest in nearly a month.
"Oil prices continued their precipitous fall as supply concerns eased further and a lack of positive economic data gave ammunition for new shorts to enter the market," ANZ analysts said in a note.
Libya restarted the 340,000 barrels per day (bpd) El Sharara oilfield after protesters ended a four-month strike, state-run National Oil Corp (NOC) said on Tuesday, a move that could double its current meagre crude output.
The government took over the Ras Lanuf and Es Sider oil ports last week, ending an almost year-long occupation that reduced Libya's output to less than a quarter of the 1.4 million bpd the OPEC member used to pump before protests started last summer.
"Libya will start to produce more and we can expect half a million more (barrels per day of crude) to come out of the state," said Jonathan Barratt, chief investment officer at Ayers Alliance Securities in Sydney.
"There's no reason for the crude price to be up at these levels. After all, economies in Europe and China are slowing." Meanwhile, Iraq's new parliament has brought forward the date of its next session to July 13, in the face of a militant insurgency that has swept large parts of the country.
Investors are eyeing more data on oil inventories in the United States and on China's trade later this week to take the pulse on oil demand at the world's two largest consumers.
Lingering weakness in the Chinese economy could prompt Beijing to launch further stimulus measures to shore up growth which could lift its fuel demand.
Data from industry group the American Petroleum Institute on Tuesday showed that US crude inventories fell by 1.7 million barrels in the week to July 4, compared with analyst expectations for a decrease of 2.2 million barrels. The US Energy Information Administration will release weekly data later on Wednesday.
Comments
Comments are closed for this article.