Oil Dips Over 4%; Falls Below $75/Barrel For The First Time This Year
As of 11:32 a.m. EDT on Tuesday, Brent Crude had slumped by 4.41% at $74.10.
Oil prices dropped over 4% on Tuesday as China's economy remained soft and OPEC+ is poised to increase production in the coming weeks. These issues overshadow the possible Libya deal, which might lead to a resumption of oil output.
As of 11:32 a.m. EDT on Tuesday, Brent Crude had slumped by 4.41% at $74.10. The U.S. benchmark, WTI Crude, was down by 4% on the day to trade at $70.61. Brent has fallen below the $75 threshold for the first time this year.
Libya's eastern government based in Benghazi has attempted to halt oil production and exports due to a dispute with the UN-backed government in Tripoli over control of the country’s central bank. On Monday, Libya’s National Oil Corporation declared force majeure at the El-Feel oil field.
However, Libya Central Bank's governor sees 'strong indications' of political agreement over the current deadlock. The deal might lead to an influx of more than 500,000 barrels per day to global markets.
Libya was producing 1 million barrels of oil every day before ordering a halt on Aug. 26.
On Monday, UN's consultations with stakeholders in Libya led to 'significant understandings' and talks are underway today as well. Libya holds Africa’s biggest proven oil reserves.
On the other hand, OPEC+ delegates have signalled that the group intends to boost oil production in October, according to sources reported by Bloomberg.
In other developments, China's manufacturing activity dropped to a six-month low in August, as per data released over the weekend. As the world’s largest importer of crude oil, this slowdown is significant.
Crude oil prices on the Multi Commodity Exchange declined to Rs 6,214 per barrel in futures trade as participants trimmed their positions on low demand. Crude oil for September delivery traded lower by Rs 8 or 0.13% at Rs 6,214 per barrel in 9,559 lots.
