Brent down on signals of Libyan oil recovery

Monday 30 December 2013 16.24
Rising violence in South Sudan in the past two weeks is threatening to cut the country's crude output
Rising violence in South Sudan in the past two weeks is threatening to cut the country's crude output

Brent crude fell below $112 a barrel today on early signals that oil output from Libya may be starting to recover.

Libya's Sarir and Messla oilfields are up and running, although the Hariga port they connect with needs to reopen before exports can resume. 

The North African OPEC producer has been pumping a mere 250,000 barrels a day (bpd) versus 1.4 million bpd in July before civil unrest disrupted flows.

Brent crude dropped 71 cents to $111.47 a barrel this afternoon. US crude was down 33 cents at $99.99.

Oil price falls were kept in check by rising violence in South Sudan that threatens to cut the country's crude output further. Despite an offer of a truce to end the conflict in South Sudan last week, the country's army fought ethnic militias over the weekend in a battle that has left at least 1,000 dead and split the oil-producing country barely two years after it won independence from Sudan. 

Crude output in South Sudan had fallen nearly a fifth to 200,000 bpd after oilfields in Unity state shut early last week due to fighting.

Adding further support, US crude oil stocks fell by 4.7 million barrels in the week to December 20 as the Gulf Coast continued to shed inventories, even though US oil production reached a 25-year high.