Move by Libya helps keep crude below $50 a barrel
Oil fell Monday as two Libyan ports are set to resume shipments and the U.S. drilling revival undermines the potential for OPEC’s output curbs to rebalance the market.
Futures dropped 1.2 percent in New York. Saudi Arabian Energy Minister Khalid Al-Falih said last week that the kingdom may extend its cuts if supplies stay above the fiveyear average.
A day later, though, data showed the U.S. rig count growing for a ninth week, and a Libya official said Sunday that the Es Sider and Ras Lanuf ports are preparing to restart oil exports.
U.S. oil prices fell below $50 a barrel for the first time in 2017 this month as near-record American stockpiles and rising output weighed on the production reductions by OPEC and its allies.
While the Organization of the Petroleum Exporting Countries won’t decide until May whether to prolong the cuts, ministers including Russia’s Alexander Novak will meet this weekend in Kuwait to discuss the deal’s progress. Money managers cut netlong positions on oil.
“The reopening of the Libyan ports is the reason for today’s drop and the U.S. rig count doesn’t help,” said Bob Yawger, director of the futures division at Mizuho Securities USA in New York. “The drop in net-length is a signal from speculators that the market is vulnerable.”
On Wall Street Monday, U.S. stocks finished mostly lower in a quiet day of trading.