Futures Movers: Brent oil facing nearly 5% weekly drop as Libyan supply worries persist

Futures Movers: Brent oil facing nearly 5% weekly drop as Libyan supply worries persist

Oil prices fell Friday as investors’ concerns over resurgent Libyan supply and global trade disputes outweighed several reports showing that crude supply was still tight.

September Brent crude LCOU8, -0.21% the international benchmark, fell 35 cents, or 0.5%, to $74.07 a barrel on the ICE Futures Europe exchange. Its closing low of the week, $73.40 on Wednesday, which was the lowest settlement since June 21. Brent was on course to close out the week 4.7% lower, with prices having suffering their sharpest daily drop in almost 2½ years Wednesday.

August West Texas Intermediate crude CLQ8, -0.11% the U.S. benchmark, slipped 12 cents, or 0.2%, to $70.21 a barrel. The contract settled at $70.33 a barrel on the New York Mercantile Exchange Thursday—the lowest since June 25. Prices also briefly hit lows under $70 a barrel for the first time in over two weeks.

That decline came after Libya’s state-run National Oil Corp. cleared the way for a potential 700,000 barrels of oil a day flowing back into the global market.

Market participants were also concerned by further trade tensions between China and the U.S. Also, Washington raised the possibility that allies could buy Iranian crude despite the reintroduction of sanctions, which would bring more oil into the market.

“It’s not surprising there was a bounce back yesterday, but today the market’s decided those falls are not quite done yet,” said Tom Pugh, commodities analyst at Capital Economics.

Such concerns outweighed reports from the Energy Information Administration, the American Petroleum Institute and the Organization of the Petroleum Exporting Countries that all showed that supply is still tight.

A report from the International Energy Agency on Thursday added to the idea, suggesting that global spare production capacity could be pushed to its limit.

“Just a week ago, such a remark would probably have sparked a pronounced price rise,” Commerzbank analysts said in a note.

Some analysts point out that any extra Libyan supply could be mitigated by ongoing outages in other countries and an expected eventual sharp drop in Iranian oil exports following the reintroduction of U.S. sanctions.

That said, fresh figures out of China revealed the lowest crude imports into the country since December, according to ING strategists. China was the second-largest importer of U.S. crude in the first quarter of 2018, according to the U.S. Energy Information Administration, but has yet to imposed tariffs on U.S. crude.

Rounding out action on Nymex, August gasoline RBQ8, +0.00% fell 0.2% to $2.0676 a gallon. August heating oil HOQ8, -0.24%  fell 0.4% to $2.1137 a gallon.

Natural-gas prices settled lower Thursday after the EIA Thursday reported that domestic supplies of natural gas rose by 51 billion cubic feet for the week ended July 6. Market consensus had called for an increase just shy of 60 billion cubic feet, according to Schneider Electric.

August natural gas NGQ18, -0.11%  was up less than 0.1% at $2.798 per million British thermal units.

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