Oil trades below $52 as investors eye Libyan crude output return

Bloomberg

Oil prices traded below $52 a barrel as investors eye the potential return of crude volumes from Libya amid continuing tension in the OPEC member that’s exempt from output cuts.
Futures were down as much as 0.8 percent in New York following a 2 percent gain on Friday. Libyan oil-facility guards backtracked on an agreement to allow supply to flow from the El Feel and Sharara fields, two of the country’s biggest, according to an engineer that operates El Feel. The dollar strengthened, making commodities priced in that currency less attractive.
Oil has traded near $50 a barrel since the Organization of Petroleum Exporting Countries agreed Nov. 30 to reduce production for the first time in eight years. Goldman Sachs Group Inc. last week increased its second-quarter crude-price forecasts and predicted stockpiles would return to normal by mid-2017 amid the curbs, which also include non-OPEC nations from Russia to Mexico.
“At the start of the day we had a weaker dollar and that’s sort of
reversed again now and it’s strengthening,” Bjarne Schieldrop, chief commodities analyst at SEB AB, said
by phone. The most important factor “is probably Libya coming in or not,” he said.
WTI for January delivery, which expires Tuesday, fell as much as 39 cents to $51.51 a barrel on the New York Mercantile Exchange and was at $51.66 as of 8:58 a.m. local time. The contract advanced $1 to $51.90 on Friday. Total volume traded Monday was about 13 percent below the 100-day average. The more-active February future was down 19 cents to $52.76.
Brent for February settlement dropped as much as 37 cents, or 0.7 percent, to $54.84 a barrel on the London-based ICE Futures Europe exchange. The global benchmark crude traded at a premium of $2.27 to WTI for the same month.
The Bloomberg Dollar Spot Index rose 0.1 percent to 1,270. It fell as much as 0.3 percent to 1,265 earlier.

Libyan Output
A group of Libyan guards prevented the flow of oil by pipeline, Khaled Hadloul, an engineer at Mellitah Oil & Gas, which operates El Feel, said by phone. The Repsol SA-operated Sharara field is also yet to restart because both fields feed into the same pipeline network, Hadloul said.
Hedge funds increased wagers on rising WTI by 2.5 percent in the week ended Dec. 13, U.S. Commodity Futures Trading Commission data show. Shorts, or bets on lower prices, tumbled 30 percent to the lowest level since May. JPMorgan Chase & Co. increases 2017, Brent, WTI crude forecasts on OPEC deal Saudi Arabia’s oil production was 10.625 million barrels a day in October, according to JODI data BP Plc agreed to buy stakes in West African licenses held by Kosmos Energy Ltd. for $916 million as it builds its gas business following an acquisition in Egypt last month. Over the weekend BP also agreed to swap about $2.2 billion of its shares for a stake in one of Abu Dhabi’s largest onshore oil concessions.