Oil prices retreat as concerns on supply diminish
SINGAPORE- Oil prices inched down on Tuesday as investors paid little attention to previous supply concerns following Libya’s declaration of a force majeure on two oilfields.
Brent LCOc1 was down 30 cents, equivalent to 0.5% at $64.90 per barrel by 0318 GMT. The crude eased down after soaring to its highest in more than a week last Monday. US West Texas Intermediate crude futures CLC1 shed 14 cents, equivalent to 0.2% at $58.40 per barrel.
“Every time we get a big geopolitical event, the market spikes up but everybody looks at that as a chance of a selling opportunity,” said Tony Nunan, oil risk manager of Mitsubishi Corp.
Two oilfields in Libya were shut down on Friday following the closure of pipeline. Such can potentially cut national production to fraction of its usual level, the country’s National Oil Corp stated.
A mandate was sent to oil traders on Monday imposing a force majeure on crude from El Sharara and El Feel, Libya’s two biggest oilfields.
Anti-government protest in Iraq had supported oil prices but officials later dismissed claims that the unrest did not boost oil activity.
In line, Bank of America Global Research increased its oil outlook for 2020 on Monday, with focus on risks from Middle East, a developing demand forecast and increased OPEC+ compliance to further reduce oil outputs.