A rebound on Libya’s oil output has placed oil prices in a lot of pressure over the weekend and it weighed against a positive economic figure from Asia that directed to a firm energy demand.
Libya’s biggest oil field Sharara continued its production last Sunday after long weeks of interruptions. The field was manufacturing more than 120,000 barrels per day (bpd) last Monday and approximately 220,000 bpd prior to their shutdown on March 27.
U.S. West Texas Intermediate crude futures were 36 cents lower at 50.24 per barrel. Benchmark Brent crude futures edged down by 41 cents to settle at $53.12 per barrel.
Managing director of PetroMatrix Olivier Jakob says the major development over the weekend is considered to be a fresh start for Sharara. He added that the concerns about how the output of Libya would turn out in the coming months added short-range volatility to the price of oil, and can be a swing factor that can shift both ways if the other one looks at the stability for the second half of 2017.
In addition to the tension on oil prices, the rig count in the United States was higher by 10 to 662 on the previous week, which makes their first quarter the strongest for rig additions since mid-2011 and further raised expectations for extra shale oil in the United States.
Prices have rallied last week for three days, driven by the reduction of Libyan output and supported by prospects that the Organization of the Petroleum Exporting Countries members and non-OPEC producers including Russia would prolong its output reductions on June.
However, investors are more concerned on money managers, price gains and hedge funds reduce net long positions by 28,942 to 372,756 contracts last week to March 28.