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Oil steadies above US$50 as Libya works to revive production

[LONDON] Oil steadied near US$50 a barrel in New York after slumping on Monday, as Opec member Libya worked to revive output at its biggest oil field.

West Texas Intermediate futures were little changed after dropping 2.1 per cent to a one-week low on Monday. The Organization of Petroleum Exporting Countries (Opec) pumped 32.83 million barrels a day in September, up 120,000 barrels a day from August, according to data compiled by Bloomberg.

Libyan production is set to recover from a five-month low as the nation's biggest field restarts following a brief halt.

Oil capped the biggest monthly advance in September since April 2016 after entering a bull market on forecasts for rising demand and as Turkey said it may halt Kurdish exports through its territory.

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US crude inventories probably extended declines last week, falling by a projected 500,000 barrels, according to a Bloomberg survey before a government report on Wednesday.

"With news of Libyan output looking to recover back to the one million-barrel-a-day level, oil bulls need to hold out for another bout of news on geopolitics," said Jens Naervig Pedersen, senior analyst at Danske Bank in Copenhagen.

West Texas Intermediate for November delivery was at US$50.51 a barrel on the New York Mercantile Exchange, 7 US cents lower, at 10am in London.

Total volume traded was about 49 per cent below the 100-day average. Prices slid US$1.09 to US$50.58 on Monday after advancing 9.4 per cent last month.

Brent for December settlement fell 7 US cents to US$56.05 a barrel on the London-based ICE Futures Europe exchange.

Prices lost US$1.42, or 2.5 per cent, to $56.12 on Monday. The global benchmark crude traded at a premium of US$5.22 to December WTI.

Saudi Arabia, Opec's biggest producer, boosted production by 60,000 barrels a day to 10.06 million barrels, while Gulf neighbour Kuwait lifted output by 50,000 barrels to 2.76 million barrels a day, according to a Bloomberg survey of analysts, oil companies and ship-tracking data.

BLOOMBERG