London, United Kingdom | – The downward drift of oil prices continued Tuesday with the benchmark rate down near $100 a barrel even as the deteriorating security situation in Libya has raised questions over the restoration of crude exports.
By early afternoon in Europe, benchmark U.S. crude for August delivery was down 71 cents to $100.20 a barrel in electronic trading on the New York Mercantile Exchange. The Nymex contract gained 8 cents to $100.91 on Monday after shedding 3.1 percent last week.
Brent crude, a benchmark for international oils, was down 82 cents to $10.89 on the ICE Futures exchange in London.
Prices fell sharply last week as worries about supply disruptions from Iraq eased and on the prospect of more supplies from Libya. Weaker than expected economic data for the first half of the year prompted the International Energy Agency and other experts to trim their forecasts for short and medium term demand.
But fighting between rival militias over Tripoli International Airport and battles in the eastern city of Benghazi are casting uncertainty over plans to reopen two oil terminals that would boost the country’s crude exports by about 500,000 barrels a day. Libya currently produces around 350,000 barrels of oil a day.
“The ports in Libya might have reopened but with such a level of insecurity in the country it is difficult to trust that stability in exports can be sustained,” said Olivier Jakob of Petromatrix in Switzerland.
Investors will also be monitoring fresh information on U.S. stockpiles of crude and refined products.
Figures for the week ending March 7 are expected to show a draw 3 million barrels in crude oil stocks and a build of 1.2 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
The American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the Energy Department’s Energy Information Administration – the market benchmark – will be out on Wednesday.
AP.
