Oil slides as am­ple sup­plies soften Libya shock

Muscat Daily - - BUSINESS -

Lon­don, UK - Oil fell as global mar­kets re­mained com­fort­ably sup­plied de­spite the sus­pen­sion of ex­ports from Libya, and as eq­ui­ties fal­tered on po­lit­i­cal and eco­nomic wor­ries in Asia.

Brent crude lost as much as 1.8 per cent in Lon­don on Tues­day, ap­proach­ing US$64 a bar­rel. Libyan ports have been closed on the or­ders of mili­tia leader Khal­ifa Haf­tar while he hag­gles over a peace settlement with the national gov­ern­ment. Yet crude mar­kets re­main calm be­cause ‘the world is awash with oil’, mainly from the US, In­ter­na­tional En­ergy Agency ex­ec­u­tive di­rec­tor Fatih Birol said in Davos.

Prices also weak­ened in tan­dem with base met­als and global eq­ui­ties fol­low­ing a se­ries of nega­tive de­vel­op­ments in Hong Kong and wor­ries about a deadly virus in China.

Brent crude for March settlement dropped US$1.01, or 1.6 per cent, to US$64.19 a bar­rel on the

ICE Fu­tures Europe ex­change as of 1:11pm in Lon­don on Tues­day. West Texas In­ter­me­di­ate fu­tures for Fe­bru­ary lost 84 cents from Fri­day’s close to US$57.70. There was no settlement on Mon­day due to the Martin Luther King Jr hol­i­day.

Haf­tar has blocked ports un­der his con­trol in a show of de­fi­ance af­ter world lead­ers failed to per­suade him to sign a peace deal end­ing the coun­try’s civil war. In Iraq, protests have halted a mi­nor oil field and rock­ets re­port­edly hit the Green Zone in Bagh­dad af­ter a week­end of un­rest.

It’s the third time in four months that a sup­ply cri­sis in

OPEC na­tions has been largely shrugged off. Brent soared to al­most US$72 a bar­rel two weeks ago as hos­til­i­ties be­tween the US and Iran erupted in neigh­bor­ing Iraq over the as­sas­si­na­tion of an Ira­nian gen­eral, en­dan­ger­ing re­gional en­ergy ex­ports, yet prices soon eased off as a wider con­flict was averted.

“It would have to be a very sub­stan­tial dis­rup­tion to push prices above US$70 a bar­rel on a sus­tain­able ba­sis,” Jeff Cur­rie, head of com­modi­ties re­search at Gold­man Sachs Group Inc, said in a Bloomberg TV interview. “The US is still sit­ting on an enor­mous amount of in­ven­tory.”

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