Futures slid as much as 0.7 percent in New York and are poised for the longest run of weekly declines since November. Libya’s supply gained as the Sharara field resumed production and two oil-export terminals reopened. Crude stockpiles at Cushing, Okla., rose the most since January, the Energy Information Administration reported on July 9. Fighting in Iraq, the second-largest OPEC member, hasn’t spread to the country’s south, home to three-quarters of its output.
“Recent news that Libya will resume the export from two major terminals have removed parts of the risk premium,” Thina Saltvedt, an analyst at Oslo-based Nordea Markets, said by e- mail. “And no news that the fighting in Iraq is spreading to the southern oil rich areas have given the oil market a breathing space, at least for the moment.”
WTI for August delivery dropped as much as 71 cents to $102.22 a barrel in electronic trading on the New York Mercantile Exchange and was at $102.28 at 1:50 p.m. London time. The contract climbed 64 cents to $102.93 yesterday, advancing for the first time in 10 days. The volume of all futures traded was about 15 percent below the 100-day average for the time of day. Prices have declined 1.7 percent this week.
Brent for August settlement slid as much as $1.09 a barrel, or 1 percent, to $107.58 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a $5.42 premium to WTI on ICE, compared with $6.86 at the end of last week. Open interest across monthly Brent futures was at 1.55 million contracts on July 9, the lowest since the start of June.
Brent is down 2.7 percent this week. Libya, which has Africa’s biggest crude reserves, was producing 350,000 barrels a day yesterday, more than double output about a month ago, according to Mohamed Elharari, a spokesman at National Oil Corp.
Rebels seeking self-rule in Libya’s east surrendered the Es Sider and Ras Lanuf terminals last week to end a yearlong blockade. The Sharara pipeline restarted on July 8, allowing the 340,000 barrel-a-day field to resume production. Libya is currently the smallest producer in the Organization of Petroleum Exporting Countries.