SINGAPORE - Oil extended losses in Asia on prospects that Libya will begin exporting more crude into a global market flush with supplies, while easing concerns about the Iraqi crisis also weighed on prices.
US benchmark West Texas Intermediate (WTI) for August delivery eased 35 cents to $104.13 while Brent crude for August was down 23 cents at $111.01 in afternoon trade. Brent fell $1.05 in London after Libya's interim Prime Minister Abdullah Al-Thani declared that authorities have regained control of export terminals blockaded by rebels. WTI fell 86 cents in New York.
"Crude prices dipped.due to the relatively quiet situation in Iraq and the Libyan port deal, both of which kept supplies up and sentiment subdued," said Sanjeev Gupta, head of the Asia Pacific oil and gas practice at business consultancy EY. Libyan production has been severely limited for a year after rebels last summer blockaded terminals in pursuit of a campaign for restored autonomy to the country's eastern region.
Its output currently stands at about 320,000 barrels per day, about a fifth of its normal output. Rebel leader Ibrahim Jodhran said the lifting of the blockade on the Ras Lanuf and Al-Sidra terminals is in line with an April deal with Tripoli, and a sign of goodwill towards the new parliament elected last week. The reopening of the two terminals will "add 500,000 barrels of crude per day into the global energy market", Gupta said.
The government already has control of two other terminals that had been blockaded. Concerns over a possible supply disruption arising out of Iraq's security crisis have eased considerably, analysts said. Islamist militants have overrun swathes of territory in Iraq in a lightning offensive since June 9, but have so far yet to directly threaten the key oil-producing region in the country's south.