Oil prices down as Libya, Nigeria set to raise output

Oil prices fell in Asia on Friday as the prospects of higher output from Libya and Nigeria further fuelled oversupply concerns, cutting short a nascent rebound.

Both contracts rose yesterday on news that 6,000 barrels of gasoline had leaked from the Colonial pipeline that carries fuel from the Gulf Coast to the eastern United States.

The leak, however, was not enough to overshadow expectations that Libya and Nigeria are due to ramp up production.

At around 0350 GMT, US benchmark West Texas Intermediate (WTI) fell 25 cents to $43.66 and Brent dipped 26 cents to $46.33. WTI is down 4.8 per cent over the week while Brent has lost 3.5 per cent.

Libya’s National Oil Corporation said this week it would double production within four weeks after it was handed control of crucial ports that had been seized by forces loyal to the country’s rival administration.

At the same time, Nigeria — Africa’s biggest crude producer — appears set to also increase its oil exports, traders said.

A persistent crude supply glut has hammered prices for more than two years as rival producers maintain high output levels in their fight for market share.

A meeting later this month in Algeria between Russia and the Organisation of the Petroleum Exporting Countries is expected to touch on price stability but analysts remain doubtful a deal can be reached to freeze or cut output.

Halley said that in the absence of comments ahead of that meeting “the street turns to the only real game in town — the (Federal Reserve policy board) rate decision” next week.