Oil prices drop before weekend

11th July 2014, Comments 0 comments

Global oil prices fell on Friday as fears receded about major supply disruptions in the Middle East, analysts said.

Brent North Sea for delivery in August slid 55 cents to stand at $108.12 a barrel in London early afternoon deals.

US benchmark West Texas Intermediate for August reversed 45 cents to $102.48 per barrel compared with Thursday's close.

Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at consultancy firm EY, said oil prices were weighed down by the imminent return of disrupted Libyan exports into a global market already flush with supply.

Brent crude has fallen more than $3.0 since July 3 after Libya's interim Prime Minister Abdullah Al-Thani declared that authorities had regained control of two export terminals blockaded by rebels.

The ports at Ras Lanuf and Al-Sidra could add about 500,000 barrels of crude per day to global energy markets, analysts say.

Output in Sharara, the site of Libya's largest oil field, is reaching its maximum production capacity of 340,000 barrels just days after it was reopened following a deal between rebels and the government, the Wall Street Journal reported.

Unaffected production in violence-hit Iraq has also had a bearish impact on oil prices, Gupta said.

"Indications that Iraqi oil exports from the southern part of the country remained insulated from the sectarian violence that has swept the north in recent weeks also weighed down prices," he said.

Iraq is the second biggest producer in the 12-nation OPEC oil cartel, pumping 3.4 million barrels a day and possessing more than 11 percent of the world's proven reserves.

© 2014 AFP

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