Oil prices ease as Libyan production rebounds

NEW YORK CITY, New York, Aug 05, 2013 (AFP)

Oil prices slipped slightly on Monday as Libyan production rebounded after protests last week.

But upbeat economic data from China and the United States helped keep a floor in the market, analysts said.

In New York the benchmark West Texas Intermediate crude for delivery in September slid 38 cents to $106.56 a barrel.

In London, Brent North Sea crude for delivery in September dropped 25 cents to $108.70 a barrel.

The resumption of production from Libya’s western oilfields helped push prices lower.

But protests at the country’s main shipping terminals continued to block exports from the central coast, Petroleum Minister Abdelbari al-Aroussi said on Monday.

Aroussi said output was now running at 700,000 barrels per day, up from the low of 330,000 bpd recorded at the height of the protests last week but still far short of the previous average of 1.42 million bpd.

“Crude supplies have improved in the west, where we have succeeded in restoring production in all fields after negotiations with the various parties,” the oil minister said.

“We are trying to reach a settlement in the central region where the Zueitina (100,000 bpd), Sedra and Ras Lanouf (600,000 bpd) terminals remain closed.”

Positive data in the world’s two largest economies prevented a steep fall in the market, however.

Banking giant HSBC’s purchasing managers’ index (PMI) for the services industry in China stood at 51.3 in July, unchanged from June and indicating continuing growth, if at a slow pace.

China’s official non-manufacturing PMI, released over the weekend, came in at 54.1 in July, from 53.9 in the previous month.

“The HSBC purchasing managers’ index for the services industry in China remains in an expansionary region, and this has provided support for crude prices,” Lee Chen Hoay, investment analyst at Phillip Futures in Singapore, told AFP.

In the US, the ISM services industry PMI for July made a strong push higher, to rose to 56.0, 3.8 points higher than June and besting the 53.2 average forecast by analysts.

“This is consistent with our view that GDP growth will continue to accelerate in the second half of the year, though remain subdued at around 2 percent,” said Paul Edelstein, economist at IHS Global Insight.

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