The price of Brent crude futures fell Monday, the most in nearly one month to $108.15 a barrel for settlement in June – a 1.51% drop from the opening price. The dip was driven by news of expected reopening of Zweitina port in Libya which produces 70,000 barrels per day (bpd).
Zweitina Oil Company’s operational coordinator, Saleh Younes ash-Shuaib said that the terminal was ready to receive tankers.
Four Libyan oil ports were seized by armed militia who worked with members of Libya’s Petroleum Facilities Guard in July last year. This caused a decline in rent revenue from oil, creating a shortfall of about $8 billion in the Libyan government’s annual budget. In March, Libya’s crude production fell to 250,000 bpd compared to 1.4 million bpd the year before.
An agreement was reached on April 6th between the rebels and the government to hand over control of two of the four ports (Zweitina and Hariga) for an official amnesty, salary payments and the rebels’ reintegration into the security apparatus.
“It’s quite clear that Libya is having an impact on sentiment,” said Michael McCarthy, chief strategist at CMC Markets in Sydney.
Although WTI June futures fell to $100.36 intraday, it managed to recover on Monday to close 0.05% higher. A Bloomberg News survey reports that US crude supplies “probably expanded by 1.1 million barrels last week”, which would make it the 14th gain in 15 weeks.
