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article imageOil slides on prospect of rising Libyan crude supplies

By AFP     Apr 3, 2014 in Business

Global oil prices sank Thursday on an expected return of Libyan supplies after a months-long disruption in exports, and following recent weak global economic data, analysts said.

New York's West Texas Intermediate (WTI) for delivery in May slid 41 cents to $99.21 a barrel.

Brent North Sea crude for May shed $1.16 to stand at $104.46 a barrel in midday London deals.

"The Libyan government is reportedly close to finalising a deal with rebels to reopen key oil ports, ending an eight-month standoff that saw oil exports from Libya plummet," said analyst Gary Hornby at British energy consultancy Inenco.

"A deal could be struck within the next 2 to 3 days, which could see Libyan oil exports boosted by approximately 600,000 barrels-per-day, quadrupling current export levels."

The North African state, a member of oil producing cartel OPEC, may be close to reaching a deal with rebels who have blockaded oil terminals since July, according to reports.

"The expectation of a growing oil supply from Libya (is) continuing to weigh," noted Commerzbank analyst Carsten Fritsch.

Libyan exports have dwindled to around 250,000 barrels a day from 1.5 million following the blockade, initially sparked by protesters demanding jobs.

Investors will be closely watching US jobless claims figures out later Thursday for clues about the strength of recovery in the US economy.

The oil market had edged lower on Wednesday as traders also digested a stream of negative economic data that has sparked concerns over the energy demand outlook.

Prices were hit by weak purchasing managers index (PMI) readings for the manufacturing sectors in China, the eurozone and the United States this week.

"Recent mixed economic data from the US, Asia and eurozone have weighed on market sentiment, raising some concerns about a possible slowdown in the oil demand for the short-term," said Sucden analyst Myrto Sokou.

"Following the recent tepid PMI manufacturing data, the outlook for the global manufacturing sector remains quite gloomy."

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