Azerbaijan, Baku, July 6 / Trend A.Badalova /
Libya temporarily reduced oil output from 1.6 million barrels per day (bpd) to 1.3 million bpd, International Oil Daily reported with reference to Libyan National Oil Corporation (NOC) Chairman Nuri Berruien.
According to Berruien, the drop in production is a result of storage problems in Libya, as well as falling oil prices.
"We don't want to reduce our prices. Libyan crude prices are based on Brent, plus or minus a margin, but some traders would like to see it sold a bit more on the "minus" side," Berruien said.
However, he added that the market is already beginning to show signs of picking up, partly because of tightened sanctions against Iran.
Following the auction on July 5, the price on Brent futures for August increased by $0.93 a barrel up to $100.7 per barrel. The cost of WTI futures for August on the New York Mercantile Exchange decreased by $0.44 percent to $87.22 per barrel.
Libya's proven oil reserves are 45 billion barrels. Libya ranks eighth in terms of oil production among 12 member countries of the Organisation of Petroleum Exporting Countries (OPEC) and third in Africa after Nigeria and Angola. The main importer of Libyan oil is Italy, followed by Germany, France and Spain.
According to Berruien, storage is also a factor behind Libya's oil production drop.
Continued delays to start-up of Ras Lanuf terminal mean that storage there is now full and traders have bought alternative crude, Berruien said.
Ras Lanuf, which can process 220,000 barrels of oil per day, accounts for well over half of Libya's oil refining capacity and is an important source of refined oil products in the Mediterranean region. Ras Lanuf's restart, which was expected in early July, has been delayed.