Oil extends losses as Iran, Libya aim to boost exports

Agencies

Oil prices recovered on Tuesday but stayed near two-month lows as increased US drilling, a strong dollar and hints of higher production by Iran and Libya brought worries about a global glut back into focus. The commodity has retreated since last month, when prices rose above $52 a barrel, as supply disruptions in Nigeria and Canada eased and the fall in US output slowed.
Britain’s vote on June 23 to
leave the European Union saw the dollar rise against most other currencies in a flight to safe-havens, hitting demand in countries with weaker units. At about 0700 GMT, US benchmark West Texas Intermediate was 21 cents higher at $44.97 while Brent was 30 cents up at $46.55.
Tehran plans to double crude exports so long as the rise in shipments is absorbed by global markets, according to a senior official at state-run National Iranian Oil Co., Bloomberg News reported. Iran is now exporting about two million barrels of its daily output of 3.8 million, said Mohsen Ghamsari, director of international affairs at the national oil firm.
It has regained about 80 percent of the market share it held before nuclear-linked western sanctions were imposed on its oil industry in 2012, Bloomberg News quoted him as saying. The sanctions were lifted in January this year after a deal with the international community on reducing its atomic programme.
Energy information provider S&P Global Platts said in a report that with the US summer driving season peak already over, inventories in the country will soon face upward pressure.
Futures fell as much as 0.6 percent in New York after dropping 1.4 percent on Monday. Iran plans to double crude exports, according to Mohsen Ghamsari, director of international affairs at state-run National Iranian Oil Co. Libya’s state crude producer is seeking to reopen oil ports and restore crude output, according to its chairman.
Oil has retreated from more than $51 a barrel last month as a rally spurred by supply disruptions in Nigeria and Canada and falling U.S. output loses momentum. Prices remain up about 70 percent from a 12-year low in February, a recovery that has prompted American producers to return drill rigs to service. Machines targeting oil
in the U.S. rose by 10 to 351, Baker Hughes Inc. said on its website
on June 8.
Also, Libya’s state producer is seeking to reopen oil ports and restore output, according to its chairman. “Some of the news coming out of Libya is showing signs that perhaps production could be set to begin picking up there again,” Angus Nicholson, a markets analyst in Melbourne at IG Ltd., said by phone. “The temporary disruptions in Libya and Nigeria have been a major contributor to some of the price gains and the lack of supply on the market of late.”
West Texas Intermediate crude for August delivery fell as much as 25 cents to $44.51 a barrel on the New York Mercantile Exchange and traded at $44.60 at 9:20 a.m. Tokyo time. The grade fell 65 cents to settle at $44.76 on Monday, the lowest close since May 10. Total volume traded was about 68 percent below the 100-day average.
Brent for September settlement dropped as much as 16 cents, or 0.4 percent, to $46.09 a barrel on the London-based ICE Futures Europe exchange.
The global benchmark oil traded at a 77-cent premium to WTI for September delivery.