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Oil prices felled by Libyan oil restart and weak gasoline demand
[NEW YORK] Crude prices were slightly lower after a volatile session on Thursday, as the restart of two key Libyan oilfields and concerns about lackluster gasoline demand fed concern over whether major oil producers can alleviate the glut of global inventories.
Libya's Sharara and El Feel oilfields, which can produce nearly 400,000 barrels per day (bpd), returned to production after protests blocking pipelines ended.
US gasoline futures led the energy complex lower in choppy trading, at one point hitting its lowest level seasonally in eight years after data on Wednesday showed inventories rose by the most in nearly three months.
Brent crude settled down 14 cents a barrel at US$51.68. US light crude was down 37 cents to US$49.25 a barrel.
"Gasoline is kind of keeping crude from going up very much," said James Williams, president of energy consultant WTRG Economics in London, Arkansas.
US gasoline tumbled almost 2 per cent to US$1.559 a gallon.
"Gasoline is leading the way lower with ample stocks, lower demand compared to last year, and an increase in gas(oline) stocks on the east coast," said Anthony Headrick of CHS Hedging.
"For the last four weeks gas demand is down 1.8 per cent from last year."
Global crude oil inventories have remained high, in part because of increased production from the United States. At 9.27 million bpd it is at its highest since August 2015, according to government data.
Amid concerns about the persistent global oil glut the Organization of the Petroleum Exporting Countries and Russia are in talks to extend a six-month deal to cut 1.8 million bpd into the second half of the year.
Opec secretary-general Mohammad Barkindo said although the oil oversupply was declining, stocks needed to fall further, in comments that pointed to an extension in cuts.
Mr Barkindo did not comment directly on whether the cut would be extended, but he said efforts were under way led by Saudi energy minister Khalid al-Falih, who is Opec president in 2017, to get a consensus before ministers meet in Vienna on May 25.
The International Energy Agency said in its latest monthly market report that oil stocks in industrialised countries stood at around 3.06 billion barrels at the end of February, some 336 million barrels above the five-year average.