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Oil prices dip as markets eye potential supply increases

Published 16/07/2018, 11:02 am
© Reuters.  Oil prices dip as markets eye potential supply increases
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SEOUL, July 16 (Reuters) - Oil prices fell on Monday as concerns about supply disruptions eased and Libyan ports resumed export activities, while traders eyed potential supply increases by Russia and other oil producers.

Brent crude futures LCOc1 were down 26 cents, or 0.4 percent, at $75.07 a barrel at 0057 GMT.

U.S. West Texas Intermediate (WTI) crude CLc1 was down 27 cents, or 0.4 percent, at $70.74 a barrel.

Supply outages in Libya and strike action in Norway and Iraq pushed oil prices higher late last week, although prices still ended down for a second straight week.

"Crude oil prices fell as fears of supply disruptions eased. News that Libya's state oil producer had restarted output from a major oil field ignited the selloff earlier in the week," ANZ Bank said in a note.

The market focus shifted towards possible supply increases, even as a Norwegian union for workers on offshore oil and gas drilling rigs stepped up a six-day strike. and other major oil producers may increase output further should supply shortages hit the global oil market, Russian Energy Minister Alexander Novak said on Friday. Innes, head of trading for Asia/Pacific at futures brokerage OANDA, said U.S.-China trade tensions "should subside this week and could be a possible plus for oil prices," but a possible sale of U.S. oil reserves would weigh on prices.

"With the Trump administration actively considering tapping into the nation's Strategic Petroleum Reserve, it could weigh negatively," Innes said.

The United States holds a reserve of about 660 million barrels, and the Trump administration was considering drawing on the country's oil reserve, which would increase supply, according to a Bloomberg report.

Meanwhile, the number of rigs drilling in the United States remained unchanged at 863 in the week to July 13 as the rate of the growth slowed amid a fall in crude prices. RIG/U

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