Brent Continues To Tumble
Brent crude oil continued to tumble on Wednesday as Libya reopened its El Sharara oilfield. The commodity traded at $108.44 at 8:40 GMT as supply concerns eased.
CNBC reported that Libya’s National Oil Corp announced that the El Sharara oilfield had reopened after four months of being shut down. The complex has a 340,000 barrel per day capacity and its restart nearly double’s Libya’s crude output. The government has also gained control of the Ras Lanuf and Es Sider ports, both of which will help ramp up Libya’s export capacity.
Tension in Iraq looked to be easing as well after the nation’s parliament agreed to move forward the date of its next meeting to July 13. Iraqi leaders are working to create a more inclusive government to decrease support for the militant groups that have occupied several northern towns.
Related Link: Brent Slips Below $110 On Supply Increase
Investors have begun to turn their attention to demand growth after months of focusing on the supply implications of these geopolitical issues.
On the demand side, investors are worried about the state of the global economy as the data from around the world has been generally poor recently. China, the world’s second largest oil consumer, will be closely watched as investors look for more signs that the nation’s recovery is getting back on track.
After months of disappointing figures, China’s most recent economic data has been well received. The nation is set to release trade data later this week, something that will provide a good picture of the nation’s crude appetite.
Also on investors’ minds will be US oil inventory data from the Energy Information Administration, due out later on Wednesday. On Tuesday, the American Petroleum Institute released data showing that US crude stocks fell 1.7 million barrels last week, below analysts’ expectations. The more closely watched EIA version of the report will be highly anticipated as investors look for confirmation of those figures.
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