SINGAPORE May 31 Oil prices fell on Wednesday,
as rising output from Libya added to concerns about increasing
U.S. production which is undermining OPEC-led production cuts
aimed at tightening the market.
Brent crude futures, the international benchmark for
oil prices, were at $51.72 per barrel at 0155 GMT, down 12
cents, or 0.2 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were
at $49.47 per barrel down 19 cents, or 0.4 percent, from their
Traders said the price declines were a result of higher
output in conflict-torn Libya, which was adding to a relentless
rise in U.S. production.
Libya's oil production is expected to rise to 800,000
barrels per day (bpd) this week, according to state-run National
Oil Corporation said on Monday.
That compares to an average of 500,000 bpd exported on
tankers so far this year, and to just 300,000 bpd shipped on
average in 2016, according to shipping data in Thomson Reuters
Libya's rising production adds to a rise in U.S. output,
which largely thanks to shale oil drilling has jumped by more
than 10 percent since the middle of last year to over 9.3
million bpd C-OUT-T-EIA, close to top producers Saudi Arabia
"Libyan and shale oil production seems to have occupied the
mind of traders overnight. That's consistent with my sense that
this is all about inventories and the associated supply overhang
in crude oil markets at the moment," said Greg McKenna, chief
market strategist at futures brokerage AxiTrader.
Rising output from the United States and Libya undermines
efforts by the Organization of the Petroleum Exporting Countries
(OPEC) and other producers including Russia to tighten an
oversupplied market by cutting production by around 1.8 million
bpd until the end of the first quarter of 2018.
An initial deal, which has been in place since January,
would have expired this June, but the production cutback has so
far not had the desired effect of substantially drawing down
Libya is an OPEC member, but it was exempt from the cuts.
The United States is not participating in the self-imposed
(Reporting by Henning Gloystein; Editing by Richard Pullin)