Concern about a sluggish economy in China outweighs effect of a blockade of oil production facilities in Libya
03 September 2024 - 07:52
byColleen Howe
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Beijing — Brent oil prices slid in Asian trade on Tuesday as concern about a sluggish economy in China bringing down demand outweighed the effect of a blockade of oil production facilities in Libya.
Brent crude futures were down 37c, or 0.48%, to $77.15 a barrel by 1.56am GMT.
US West Texas Intermediate (WTI) crude, which did not have a Monday settlement because of the US Labor Day holiday, was 28c up from its Friday close of $73.55.
“Oil remains under pressure given lingering Chinese demand concerns. Weaker than expected PMI [purchasing managers index] data over the weekend would have done little to ease these worries,” said Warren Patterson of ING.
China’s PMI hit a six-month low in August. On Monday, China posted the first decline in new export orders in eight months in July, and said new home prices grew in August at their weakest pace in 2024.
“These demand jitters are clearly more than offsetting the supply disruptions from Libya,” Patterson said.
The UN support mission in Libya said it held talks on Monday to resolve a dispute over control of the central bank that triggered a blockade of the country’s most valuable commodity, sending oil production to less than half of its usual level.
Rival factions concluded a draft agreement and aimed to sign it on Tuesday, the UN said without providing further details.
Oil exports at Libyan ports remained halted on Monday and production curtailed, six engineers told Reuters.
Libya’s National Oil Corp (NOC) said on Monday it had declared force majeure on its El Feel oilfield from September 2.
Total production had plunged to little more than 591,000 barrels a day (bbl/day) by August 28 from nearly 959,000bbl/day on August 26, NOC said. Production was at about 1.28-million barrels a day on July 20.
Eight members of oil cartel Opec and affiliates, known as Opec+, were scheduled to boost output by 180,000bbl/day in October, a plan industry sources said was likely to go ahead regardless of demand worries.
“There are suggestions they will stick to their planned increase, however much will depend on how much more weakness we see in the market,” said Patterson.
A Reuters survey on Monday found Opec’s oil output in August fell to its lowest level since January.
Worsening supply concern, two oil tankers were attacked on Monday in the Red Sea off Yemen but did not sustain major damage. The Iran-backed Houthis claimed responsibility.
Also, Russia’s Gazpromneft Moscow refinery suspended operations at one unit for repairs. A fire broke out on Sunday after a drone strike at the plant, which processed 11.6-million tonnes of crude oil last year.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil slips as weak demand counters Libyan blockade
Concern about a sluggish economy in China outweighs effect of a blockade of oil production facilities in Libya
Beijing — Brent oil prices slid in Asian trade on Tuesday as concern about a sluggish economy in China bringing down demand outweighed the effect of a blockade of oil production facilities in Libya.
Brent crude futures were down 37c, or 0.48%, to $77.15 a barrel by 1.56am GMT.
US West Texas Intermediate (WTI) crude, which did not have a Monday settlement because of the US Labor Day holiday, was 28c up from its Friday close of $73.55.
“Oil remains under pressure given lingering Chinese demand concerns. Weaker than expected PMI [purchasing managers index] data over the weekend would have done little to ease these worries,” said Warren Patterson of ING.
China’s PMI hit a six-month low in August. On Monday, China posted the first decline in new export orders in eight months in July, and said new home prices grew in August at their weakest pace in 2024.
“These demand jitters are clearly more than offsetting the supply disruptions from Libya,” Patterson said.
The UN support mission in Libya said it held talks on Monday to resolve a dispute over control of the central bank that triggered a blockade of the country’s most valuable commodity, sending oil production to less than half of its usual level.
Rival factions concluded a draft agreement and aimed to sign it on Tuesday, the UN said without providing further details.
Oil exports at Libyan ports remained halted on Monday and production curtailed, six engineers told Reuters.
Libya’s National Oil Corp (NOC) said on Monday it had declared force majeure on its El Feel oilfield from September 2.
Total production had plunged to little more than 591,000 barrels a day (bbl/day) by August 28 from nearly 959,000bbl/day on August 26, NOC said. Production was at about 1.28-million barrels a day on July 20.
Eight members of oil cartel Opec and affiliates, known as Opec+, were scheduled to boost output by 180,000bbl/day in October, a plan industry sources said was likely to go ahead regardless of demand worries.
“There are suggestions they will stick to their planned increase, however much will depend on how much more weakness we see in the market,” said Patterson.
A Reuters survey on Monday found Opec’s oil output in August fell to its lowest level since January.
Worsening supply concern, two oil tankers were attacked on Monday in the Red Sea off Yemen but did not sustain major damage. The Iran-backed Houthis claimed responsibility.
Also, Russia’s Gazpromneft Moscow refinery suspended operations at one unit for repairs. A fire broke out on Sunday after a drone strike at the plant, which processed 11.6-million tonnes of crude oil last year.
Reuters
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