Oil prices fall but supply tight with focus on outages
Oil prices slipped on Monday as concerns about supply disruptions eased and Libyan ports reopened while traders eyed potential supply increases by Russia and other oil producers, Reuters reports.
But global supply remained tight with investors wary over the impact of production losses in several exporting countries.
“There are mixed supply signals,” said Kim Kwang-rae, analyst at Samsung Futures.
Brent crude was down 80 cents at $74.53 a barrel by 0952 GMT. U.S. light crude was down 90 cents at $70.11.
Supply outages in Libya, a labour dispute in Norway and unrest in Iraq all helped push oil prices higher late last week, although prices still fell for a second straight week.
Russia and other oil producers may raise output by 1 million barrels per day (bpd) or more if shortages hit the market, Russian Energy Minister Alexander Novak said.
“If we need more than 1 million bpd, I don’t rule out that we can quickly discuss it and make a quick decision,” Novak told reporters on Friday.
Production at Libya’s giant Sharara oilfield was expected to fall by at least 160,000 barrels per day (bpd) after two staff were abducted in an attack by an unknown group, the National Oil Corporation said on Saturday.
A Norwegian union for workers on offshore oil and gas drilling rigs stepped up a six-day strike on Monday that has hit oil output.
In Iraq, two protesters dies on Sunday in clashes with security forces in the town of Samawa amid anger in southern cities over public services and corruption.
Demonstrations have not yet affected crude production in Basra, whose shipments account for more than 95 percent of OPEC producer Iraq’s state revenue. But any disruption could severely impact the country’s economy and push up prices.
Investors are also on edge over the impact of the trade dispute between the United States and its big trading partners.
U.S. President Donald Trump and Russian President Vladimir Putin are set to hold their first stand-alone meeting in Helsinki on Monday. Trump has been vocal about his dissatisfaction with higher oil prices, asking OPEC to lower prices.
Stephen Innes at futures brokerage OANDA said U.S.-China trade tensions “should subside this week and could be a possible plus for oil prices,” but a possible sale of U.S. oil reserves would hurt prices.
The United States holds a reserve of about 660 million barrels, and the Trump administration was considering drawing on the country’s oil reserve, which would increase supply, according to a Bloomberg report.