SINGAPORE: Oil prices fell on Wednesday after a rise in US crude inventories and ongoing high output from Opec producers revived concerns of a fuel supply overhang.
Brent crude futures LCOc1, the international benchmark for oil prices, were at $48.64 per barrel at 0613 GMT, down 20 cents, or 0.4 per cent, from their last close.
US West Texas Intermediate (WTI) crude futures CLc1 were at $46.22 per barrel, down 18 cents, or 0.4 per cent. US crude stocks rose last week, adding 1.6 million barrels in the week to July 14 to 497.2 million barrels, industry group the American Petroleum Institute said on Tuesday.
Outside the United States, supplies from the Organization of the Petroleum Exporting Countries (OPEC) remained high, largely because of rising output from member-states Nigeria and Libya, despite the club’s pledge to cut production.
“Production in Libya is currently reported at or above 1 million barrels per day, while August loading schedules for Nigeria have risen to just over 2 million barrels per day,” BNP Paribas said.
The French bank said that the rising output from Nigeria and Libya eroded 40 per cent of the 1.25 million barrels per day cut by other Opec members since the beginning of the year.
A Saudi Arabian industry source said on Tuesday that the kingdom, which is by far Opec’s biggest producer, was committed to tighten the market.
“We hope to accommodate the rise in production from Libya and Nigeria taking into consideration other supply adjustments as well. But we emphasise that we have to work together with other producers and with the two countries,” the source said. Nigeria and Libya are exempt from the deal between Opec and other producers, including Russia, to cut production by around 1.8 million barrels per day between January this year and March 2018.
— Reuters
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