Wednesday, cornered and pressed between distresses of crude oversupply brought by Libya’s escalating crude output, as well as of fears of condensed futures investment in the industry: prices of oil dropped. The international benchmark, Brent crude futures were down at 0.5% or 26 cents and traded at $51.61 a barrel. In addition, the United States West Texas Intermediate was down by 0.4% or 20 cents and traded at $47.63 per barrel.
Low prices and sufficient supplies were causing the oil to experience its current low industry investment levels; this is according to Bernstein Research, in which Bernstein Research also reminded investors that contract levels seems to be insufficient to boost recovery in earnings. On the other hand, Libya’s largest oil field: the Sharara oil field is progressively resuming on Tuesday after a shutdown due to a pipeline blockade.
In accordance to this, recently, Libya’s Sharara oilfield has reached an approximate supply of 280,000 barrels a day. Sharara’s production is the main key to the country’s oil supply, which swelled above 1 million barrels per day in late June 2017, which was four times higher from its level in 2016.
OPEC or the Organization of Petroleum Exporting Countries together with non-OPEC members including Russia has made a deal to limit crude supplies between January 2017 until March of 2018. However, Libya—being a member of the organization and has been exempted from the cuts, Libya’s ascending and strong crude supply OPEC seems to have fallen short off its deal.