Oil extends losses on signs of end to Libya conflict, demand worries By Reuters
by Yuka Obayashi
TOKYO (Reuters) – Oil prices fell on Wednesday, extending the previous day's decline of more than 4%, on expectations that a political dispute halting exports to Libya could be resolved and on concerns about falling global demand.
November futures were down 28 cents, or 0.4%, at $73.47 by 0052 GMT after falling 4.9% in the previous session. US West Texas Intermediate crude futures for October delivery fell 31 cents, or 0.4%, to $70.03 after falling 4.4% on Tuesday.
Both contracts have fallen sharply since December amid signs of an agreement to resolve a political conflict between rival factions in Libya that has cut production by nearly half and halted exports.
“Selling continued in Asia amid expectations of an agreement that could resolve the conflict in Libya,” said Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd.
“The market remains under pressure and due to concerns over the volatility of fuel following weak economic indicators from China and the United States,” he said.
Libya's two legislatures agreed on Tuesday to jointly appoint a central bank governor, potentially easing a battle over control of the country's oil reserves that has sparked an ongoing conflict.
Exports of Libyan oil to major ports were suspended on Monday and production was reduced across the country. Libya's National Oil Corp (NOC) has declared force majeure at its El Feel oil field as of September 2.
Markets also weakened after data from the Institute for Supply Management on Tuesday showed US manufacturing remained subdued despite a slight improvement in August from an eight-month low in July.
In China, the world's largest consumer of crude, the latest data showed that manufacturing activity fell to a six-month low in August and growth in new home prices slowed in August.
Weekly US goods data was delayed by the Labor Day Monday holiday. The report from the American Petroleum Institute will be released at 4:30 pm EDT (2030 GMT) on Wednesday and the Energy Information Administration will be published at 11:00 am EDT (1500 GMT) on Thursday.
Oil and gasoline were expected to fall last week, while distillate benchmarks are likely to rise, a preliminary Reuters poll said on Tuesday. [EIA/S][API/S]
