Brent crude oil fell to a three-week low yesterday, on news of a potential rise in Libyan supply.
The global oil benchmark dropped to just above $110 a barrel, having lost 2.3 per cent last week, after Libyan rebels agreed to allow the resumption of oil exports from two major ports, ending an almost year-long blockade.
State-run National Oil Corp (NOC) lifted force majeure from the major eastern Ras Lanuf and Es Sider oil ports on Sunday.
Libya, which has the largest oil reserves in Africa, used to produce 1.4m barrels of oil per day before rebels seized the ports last year.
The country’s current output is running at 325,000 barrels a day, according to an NOC spokesman.
“In due course [this] could mean Libya gets nearer to around 900 barrels per day,” said oil and gas analyst Malcolm Graham-Wood.
“This should fill in the excess of demand over supply for Opec crude at the moment although as ever with Libya, nothing is certain.
“If exports from Iraq remain at these levels the oil price will not rise any further for the time being.”
The news overrode ongoing fears about the geopolitical tensions in Iraq, which caused the price of Brent crude to rise above $115 a barrel late last month.
The conflict between the Iraqi government and Sunni militants is yet to have a big effect oil exports, as the unrest has mainly been in the north of the country while most production takes place in the south.