Oil prices fall as Libyan production recovery weighs

NEW YORK — Oil prices fell on Monday as a rebound in Libyan oil output weighed against upbeat economic data from Asia that pointed to strong energy demand from the region.

Benchmark Brent futures for June delivery lost 41 cents, or 0.80%, to settle at $53.12 a barrel. That, however, was up 29 cents from Friday’s close when May was still the front-month, making it the highest close for the contract in nearly four weeks.

US West Texas Intermediate crude, meanwhile, declined 36 cents, or 0.70% to settle at $50.24 per barrel.

Traders noted both US and Brent futures retreated in intraday trade after failing to rise much above their 100-day moving averages, a technical resistance level.

Libya’s Sharara oil field, the country’s largest, resumed production on Sunday after a weeklong disruption. State- owned NOC lifted force majeure on loadings of Sharara crude on Monday, sources told Reuters. The field was producing around 120,000 barrels per day ( bpd) on Monday and about 220,000 bpd prior to the March 27 shutdown.

“The main development over the weekend is the restart of Sharara,” said Olivier Jakob, managing director of PetroMatrix.

Uncertainty about Libyan output added volatility to oil prices, he said, calling it “a swing factor that can make it move both ways if one looks at the balances for the second half of the year.”

Also pressuring oil prices, energy services firm Baker Hughes said the US rig count rose last week, making the first quarter the strongest for rig additions since mid-2011.

Still, data from Asia suggested solid energy demand going forward.

Manufacturing data showed factories across much of Asia posted another month of solid growth in March. Among others, purchasing managers’ index data from China showed its factories expanded for a ninth straight month.

“The global economy remains on track for continuing growth in 2017, a support for the demand side of the petroleum market,” Tim Evans, Citi Futures’ energy futures specialist, said in a note.

Last week, oil prices rallied for three days on reduced Libyan output and expectations that the Organization of the Petroleum Exporting Countries ( OPEC) and non- OPEC producers would extend production cuts beyond June. —