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Oil Prices Drop on News That Libya Will Resume Oil Reports

July 11, 2018 at 13:17 by Matt Jackson

News that Libya will resume exporting oil from its Eastern ports, helping to allay fears of a supply decrease. OPEC also reported that its supply levels rose in June, adding a further 173,000 barrels per day to its export levels. The market is still waiting for the weekly Energy Information Administration report, due later today, but supply increases currently dominate the news and dictate prices.

Libya had banned the exporting of oil from its Eastern docks, after control of the ports was seized by an armed faction. While the political turmoil remains incredibly precarious, the oil producing nation announced on Wednesday that it would allow the export of oil from the ports after regaining control. The unplanned outage of supply from Libya had helped push oil prices upwards, and analysts predict that the current situation would lead to 700,000 barrels a day being released back to the market in time.

Also pertinent to oil price news is the monthly OPEC report that shows the oil producing nations increased their market supply by 173,000 barrels per day in June. OPEC had come under increased pressure from the USA, to increase their supply in order to stabilize prices and minimize disruption following sanctions being imposed against Iran and Venezuela, and also in light of the Libyan disruption. OPEC said that they would increase supply, but only to the previously agreed upon level, which won’t be enough to make up the total shortfall but is believed to have been a compromise to keep the USA and warring factions within OPEC happy.

The Energy Information Administration is due to release its weekly report on crude stockpiles later today, and this could help prevent further price slippage. The American Petroleum Institute said that its data showed a decline of 6.8 million barrels of crude oil. If the EIA data matches this report, the declining stockpile could help push prices back up again.

WTI crude oil saw prices slip 1.16% down to $73.25, while Brent crude saw an even bigger drop, falling 2.05% to $77.24 at 14:00 GMT.

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