Brent Below $82 As Supply Grows

Brent crude oil prices continued to waver on Tuesday as a growing supply glut and a strong US dollar weighed. The commodity traded at $81.66 with geopolitical problems in Ukraine and Libya having little impact on its price.

CNBC reported that Libyan production has fallen to 500,000 barrels per day after the nation’s government lost control of some of its largest oilfields. Libyan output had reached 900,000 bpd in September after falling to 100,000 bpd over the summer when most of its oilfields were blockaded by protesters.

Meanwhile, US shale oil production has more than made up for Libya’s shortcoming, keeping oil prices well below $100. Some see the US cutting production next year, but unless there is an official announcement, most expect to see prices continue to drop.

OPEC will hold its annual meeting on November 27 where the cartel’s members will likely discuss whether or not to cut output in order to boost prices. The group’s members have been divided over whether or not to cut supply, but most expect to see no change following the meeting. Though some nations like Venezuela require prices to be above $100 in order to balance their budgets, others are calling for output to remain the same. Both Saudi Arabia and Iran have said they are willing to accept low prices for an extended period in order to gain market share.

Moving forward, investors will be watching the cartel for any signs of a cut and looking to winter demand to help buoy prices. However, without any real catalyst, Brent prices are expected to remain low until there is a major supply disruption or cut.