Oil eases as Libya output decline offsets risks to Asian demand
Oil prices were little changed on Thursday as concerns over lower crude production in Libya offset expectations that rising coronavirus cases in India and Japan would cause energy demand to decline.
Brent futures settled 0.12% higher at $65.40 per barrel, while U.S. West Texas Intermediate (WTI) crude gained 0.13% to settle at $61.43 per barrel.
Both benchmarks have switched from positive to negative several times on Thursday. If they settle lower, it would be for a third day in a row. Currently, they are on track for their lowest closes since April 13.
India, the world’s third-largest oil user, on Thursday reported the world’s highest daily increase to date with 314,835 new coronavirus cases.
Indian Oil Corp Ltd’s (IOC) refineries are operating at about 95% of their capacity, down from 100% at the same time last month, two sources familiar with the matter told Reuters.
Japan, the world’s No.4 oil importer, is expected to announce a third wave of lockdowns affecting Tokyo and three western prefectures, media reported.
Underlying bearish sentiment was also stoked by progress on talks between Iran and world powers to resurrect the 2015 nuclear accord, PVM oil analyst Tamas Varga said. Analysts have said Iran has the potential to provide about 1-2 million barrels per day (bpd) in additional oil supply if a deal is struck.
Any increase in supply from Iran would be on top of extra barrels already expected from the Organization of the Petroleum Exporting Countries and allies, including Russia, a group known as OPEC+, which plans to bring back about 2 million bpd of production over the next three months.
OPEC+ members are due to meet next week but major changes to policy are unlikely, Russia’s deputy prime minister and OPEC+ sources said.
Libya’s oil production fell to about 1 million bpd in recent days and could drop further due to budgetary issues, the National Oil Corporation said on Thursday.
Reference: CNBC
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