The price of oil slipped below US$104 a barrel Monday on expectations that Libya will soon boost its exports of crude.
Benchmark West Texas Intermediate crude for August delivery fell 53 cents to close at US$103.53 a barrel on the New York Mercantile Exchange. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 40 cents to close at US$110.24 in London.
An agreement in Libya between the central government and a regional militia is expected to lead to the reopening of two oil terminals that would boost the country’s crude exports by about 500,000 barrels a day. Libya currently produces around 350,000 barrels of oil a day.
While some analysts said it was only a matter of days before crude shipments could be again on their way from the ports of Es Sider and Ras Lanuf, others were more cautious.
“We would not expect to see a resumption of exports from the facilities this month assuming that no field maintenance was done since the shutdown of close to one year,” JBC Energy in Vienna said in a note to clients.
Oil prices have been slowly sliding since it reached a 10-month closing high of US$107.26 a barrel on June 20. Concerns were high then that insurgents in Iraq would be able to push into important oil-producing regions of the country and choke off supplies from OPEC’s second-biggest exporter. As the Iraqi government has regained some control in recent days, those fears have waned and oil prices have dropped.
In other energy futures trading on the Nymex, wholesale gasoline fell 3.1 cents to close at US$2.989 a U.S. gallon (3.79 litres), heating oil fell 1.4 cents to US$2.915 a gallon and natural gas fell 18.1 cents to close at US$4.225 per 1,000 cubic feet.