Forexpros – Crude oil futures were down for the first time in three days on Tuesday, retreating from a three-week high on news that Libyan oil exports are returning to pre-war levels faster than expected, while concerns over a slowdown in demand from China also weighed.
On the New York Mercantile Exchange, light sweet crude futures for delivery in April traded at USD107.17 a barrel during European morning trade, slumping 0.64%.
The April contract is due to expire at the end of Tuesday’s trading session. Contract expiration often leads to volatile sessions as market participants look to close out positions or reposition their portfolios.
Meanwhile, the more actively traded contract for May delivery dropped 0.84% to trade at USD107.64 a barrel. Prices rose to USD108.68 on Monday, the highest since March 2.
Crude prices came under pressure after a senior official at Libya’s National Oil Corporation said that the country expects oil exports to rise to 1.4 million barrels per day in April, exceeding top pre-war deliveries.
The return of Libyan oil exports to levels seen before the civil war that ousted Muammar Gaddafi in February 2011 beat even the most optimistic estimates and was expected to ease a global shortfall of oil caused by outages and conflicts, leading to lower prices.
The news comes a day after reports that Saudi Arabia increased its oil production to the second highest level since 1980. The world’s biggest exporter of crude also boosted shipments to 7.51 million barrels a day in January from 7.36 million barrels in December.
The increased Saudi production figures have come in response to lingering fears over a disruption to supplies from Iran.
Iran and Western nations have been locked in a stand-off in recent months over Tehran’s nuclear program.
Growing tensions between Iran and Israel also remain in focus. There are fears that an escalation of hostilities between Israel and Iran could set off a conflict across the region and send oil prices skyrocketing.
Iran produces about 3.5 million barrels of oil a day, making it the second largest oil producer in the OPEC, after Saudi Arabia.
Meanwhile, concerns over a deeper-than-expected economic growth slowdown in China also weighed.
China is the world’s second largest oil consumer after the U.S. and has been the engine of strengthening demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for May delivery fell 0.84% to trade at 124.66 a barrel, with the spread between the Brent and crude contracts standing at USD17.02.
Forexpros
