Business & Finance Wednesday 31 May 2017
Oil prices fell one percent on Wednesday, with the increase in Libyan production, which has fueled concerns already existing US production of high undermining the production cuts, led by OPEC in order to reduce the gap between supply and demand in the market.
By 06:57 GMT, International benchmark Brent crude futures fell 54 cents, or one percent from the previous close to $ 51.30 a barrel.
The decline in US crude West Texas Intermediate futures 51 cents, or one percent from the previous closing price to $ 49.15 a barrel.
Traders said the decline in prices was the result of higher production in Libya, which is torn apart by the conflict, which exacerbated the continued growth of the US production effect.
According to the National Oil Corporation in Libya, on Monday, that the production is expected to rise from Libya crude to 800 thousand barrels per day this week.
It is likely to boost that Libya's oil exports, as shipping data showed that excluding exports transported via pipelines exported to Libya 500 thousand barrels per day on average since the beginning of the year, compared with an average of 300 thousand barrels per day in 2016.
The increase in US production due largely to the high drilling activities for exploration of shale oil more than 10 percent since the middle of last year to exceed 9.3 million barrels per day, close to Saudi Arabia and the levels of Russia's largest oil producers in the world.
And it undermines the high US production and Libyan efforts made by the Organization of the Petroleum Exporting Countries (OPEC) and some producers abroad, including Russia, to reduce the gap between supply and demand in the oversupplied market through production cut about 1.8 million barrels per day until the end of the first quarter of 2018.