Supply Glut Continues To Weigh On Brent Prices
Brent crude oil remained near Tuesday’s two-month low of $101.07 on Wednesday as investors saw geopolitical tension easing.
The commodity traded at $101.69 at 8:25 GMT on Wednesday morning as markets waited for U.S. inventory data for a better picture of the number one consumer’s crude demand.
Brent has been sliding over the past few weeks despite ongoing conflicts in Eastern Europe, Africa and the Middle East. Now, as some of those conflicts fade, the commodity is under even more pressure, leading some to speculate that it could dip to $100.
After having its export capacity diminished to nearly half for the past year, Libya is slowly reopening its oil ports and ramping up crude shipments.
Though the nation is still battling a deep divide, CNBC reported that the country’s National Oil Corp said oil production in Libya was up to 562,000 barrels per day from 535,000 barrels per day just a week earlier.
That figure is still far below Libya’s normal export capacity but shows a marked improvement.
WTI prices gained some support from the American Petroleum Institute’s report on U.S. inventories on Tuesday, as it suggested a healthy demand in the world’s top consumer. The report showed a 1.4 million barrel decline in crude stockpiles last week, above expectations for a 1.2 million barrel drop.
Moving forward investors will be looking to the Energy Information Administration’s version of the same report, due out later on Wednesday. The report will likely confirm the decline and boost WTI prices.
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