Brent oil falls 4% to Three-month Low as Supply Outage Concerns Ease

July 17, 2018

Oil prices fell more than 4% on Monday, with Brent reaching a three-month low, as Libyan ports reopened and traders eyed potential supply increases by Russia and other producers.

Brent crude futures fell by US $3.49 to settle at US $71.84 a barrel, a 4.63% loss, while U.S. West Texas Intermediate (WTI) crude futures fell by US $2.95 to settle at US $68.06 a barrel, a 4.15% loss.

Brent’s dive pushed it to a session low of US $71.52 during the session, its lowest since mid-April.

Falling prices offset gains late last week caused by supply outages in Libya, a labor dispute in Norway and unrest in Iraq.

Russian Energy Minister Alexander Novak told reporters on Friday that Russia and other oil producers could raise output by 1 million barrels per day or more if shortages hit the market.

Also weighing on futures were reports the United States could tap its Strategic Petroleum Reserve, which would add supply to the market.

Concerns over China’s second-quarter GDP growth also was negative for prices during Monday’s session. The country’s economy expanded at a slower pace as Beijing’s efforts to contain debt hurt activity, while June factory output growth weakened to a two-year low in a worrying sign for investment and exporters as a trade war with the United States intensified.

(Reuters)