Oil slips as concern about disruptions ease

Seoul — Oil prices fell on Monday as concern about supply disruptions eased and Libyan ports resumed export activities, while traders eyed potential supply increases by Russia and other oil producers.

Brent crude futures were down 48c, or 0.6%, at $74.85 a barrel at 3.02am GMT.

US West Texas Intermediate (WTI) crude was down 39c, or 0.6%, at $70.62 a barrel.

Supply outages in Libya and strikes in Norway and Iraq pushed oil prices higher late last week, although prices still ended down for a second consecutive week.

“Crude oil prices fell as fears of supply disruptions eased. News that Libya’s state oil producer had restarted output from a major oil field ignited the sell-off earlier in the week,” ANZ Bank said in a note.

The market focus shifted towards possible supply increases, even as a Norwegian union for workers on offshore oil and gas drilling rigs stepped up a six-day strike.

“There are mixed supply signals and I think the [Brent] price is likely to be in the low-to-mid $70s range,” said Kim Kwang-rae, commodity analyst at Samsung Futures in Seoul.

“A summit between US President Trump and Russian President Putin is also being watched in case they say something about oil,” Kim said.

US President Donald Trump and Russian President Vladimir Putin are set to hold their first standalone meeting in Helsinki on Monday. Trump has been vocal about his dissatisfaction with higher oil prices, asking Opec to lower prices.

Russia and other major oil producers might increase output further should supply shortages hit the global oil market, Russian Energy Minister Alexander Novak said on Friday.

Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda, said US-China trade tension “should subside this week and could be a possible plus for oil prices”, but a possible sale of US oil reserves would hurt prices.

“With the Trump administration actively considering tapping into the nation’s Strategic Petroleum Reserve, it could weigh negatively,” Innes said.

The US 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.

Meanwhile, the number of rigs drilling in the US was unchanged at 863 in the week to July 13 as the rate of the growth slowed amid a fall in crude prices.

Reuters