Oil prices fell on Aug. 23, weighed down by concerns about rising production from Libya feeding into an oversupplied market and a surprise increase in U.S. gasoline inventories.
Benchmark Brent crude futures were down 27 cents at $51.60 a barrel (bbl) at 4:50 a.m. CST (9:50 GMT). U.S. West Texas Intermediate crude futures were trading at $47.67/bbl, down 16 cents.
Production from Libya's Sharara oil field, the conflict-riven country's largest, has been seesawing. The field remained shut on Aug. 23, two Libyan oil sources told Reuters. The field had restarted at least once on Aug. 22 amid conflicting reports about whether it had reopened.
"[The] flood of news reports makes it clear that the situation in Libya is still chaotic and that conditions in the country are still far from normal," Commerzbank analysts wrote.
Sharara recently reached an output of 280,000 bbl/d, but closed this week due to a pipeline blockade. Its production is key to Libya's oil output, which surged above 1 million bbl/d in late June, about four times its level last summer.
Libya's rising output is a headache for OPEC, which together with non-OPEC producers including Russia has pledged to cut around 1.8 million bbl/d of supplies between January this year and March 2018 in an attempt to remove a global glut.
Additionally, industry data released by the American Petroleum Institute showed on Aug. 22 that U.S. gasoline stocks rose by 1.4 million bbl in the week to Aug. 18, compared with analysts' expectations of a 3.5-million-bbl drop.
Jeffrey Halley, senior market analyst at futures brokerage OANDA, said rising U.S. gasoline inventories were "not a good sign during the U.S. summer driving season."
Official inventory data from the U.S. Energy Information Administration is due later on Aug. 23.
Recommended Reading
Wayangankar: Golden Era for US Natural Gas Storage – Version 2.0
2024-04-19 - While the current resurgence in gas storage is reminiscent of the 2000s —an era that saw ~400 Bcf of storage capacity additions — the market drivers providing the tailwinds today are drastically different from that cycle.
Ozark Gas Transmission’s Pipeline Supply Access Project in Service
2024-04-18 - Black Bear Transmission’s subsidiary Ozark Gas Transmission placed its supply access project in service on April 8, providing increased gas supply reliability for Ozark shippers.
Kinder Morgan Sees Need for Another Permian NatGas Pipeline
2024-04-18 - Negative prices, tight capacity and upcoming demand are driving natural gas leaders at Kinder Morgan to think about more takeaway capacity.
Scathing Court Ruling Hits Energy Transfer’s Louisiana Legal Disputes
2024-04-17 - A recent Energy Transfer filing with FERC may signal a change in strategy, an analyst says.
Balticconnector Gas Pipeline Will be in Commercial Use Again April 22, Gasgrid Says
2024-04-17 - The Balticconnector subsea gas link between Estonia and Finland was damaged in October along with three telecoms cables.