Oil falls as Nigeria, Libya set to swell glut

Futures fall 1.6% in New York, extending a weekly drop to 5.8% as two nations prepare to boost exports

Oil fell to the lowest intraday level in two weeks in New York on speculation that the resumption of supplies in Libya and Nigeria may compound the global crude surplus.

Futures fell 1.6 per cent in New York, extending a weekly decline to 5.8 per cent. Organisation of Petroleum Exporting Countries (Opec) members Libya and Nigeria, whose supplies have been reduced by domestic conflicts, are preparing to boost exports within weeks. The oil surplus will last longer than previously thought as demand growth slumps and output proves resilient, the International Energy Agency (IEA) said Tuesday.

Oil has fluctuated since rallying in August amid speculation the Opec and Russia would agree on measures to stabilise the market at a meeting in Algiers later this month. All 14 member countries will attend the September 27 meeting, according to an official with knowledge of the plans.

“Oil prices keep trading in a narrow range,” said Michael Poulsen, an analyst at Global Risk Management Ltd. “A short spike yesterday is erased this morning as supply glut worries rule.”

West Texas Intermediate for October delivery fell 71 cents to $43.20 (Dh158.68) a barrel on the New York Mercantile Exchange at 12.17pm in London. Prices on Thursday gained 0.8 per cent to close at $43.91 a barrel. Total volume traded about 7 per cent below the 100-day average.

Libya ports

Brent for November settlement fell as much as 1.9 per cent to $45.70 a barrel on the London-based ICE Futures Europe exchange. Prices advanced 74 cents, or 1.6 per cent, to settle at $46.59 on Thursday. The global benchmark traded at a $2 premium to WTI for November delivery.

Libya’s state oil company on Wednesday lifted curbs on crude sales from the ports of Ras Lanuf, Es Sider and Zueitina, potentially unlocking 300,000 barrels a day of supply. In Nigeria, Exxon Mobil Corp was said to be ready to resume shipments of Qua Iboe crude, while a second grade operated by Royal Dutch Shell is scheduled to restart about 200,000 barrels a day of flow within days.

World oil stockpiles will continue to accumulate through 2017, a fourth consecutive year of oversupply, according to the IEA. Sensex (IN)