CRUDE SUMMARY: Libyan supply continues to exert downward pressure

09 July 2014 19:55 Source:ICIS News

LONDON (ICIS)--Crude oil prices opened on Wednesday in mildly positive territory, but while the NYMEX contract remained range-bound, Brent fell into negative territory during early hours, before dropping sharply as Europe opened on easing supply concerns in Libya.

Libya’s oil sector has taken a step back to normality after its 340,000 bbl/day El Sharara oilfield resumed operations. However, it could take months before the field produces anywhere near its capacity.

Brent inched its way back up during morning trading, but both crude futures declined amid thin trading in the afternoon despite data revealing a larger-than-expected  2.4m bbl drop in US crude stocks last week.

The bearish sentiment arose on the back of the weekly Energy Information Administration (EIA) data, which showed a rise in supplies at Cushing, Oklahoma, the delivery point for the NYMEX contract.

Brent then turned choppy during the second half of the afternoon, while the NYMEX lost its steam and weakened. Towards the close, both contracts attempted a rally, but they both remained in deep negative territory by the settlement.

August Brent closed the day down 66 cents at $108.28/bbl, having traded in a range between $108.14/bbl and $109.00/bbl.

August West Texas Intermediate (WTI) closed the day down $1.11 at $102.29/bbl, having traded in a range between $102.00/bbl and $103.60/bbl.

Additional reporting by Kawai Wong

By Cuckoo James