Oil prices down in Asia as supply fears fade| MENAFN.COM

Friday, 01 July 2022 02:03 GMT

Oil prices down in Asia as supply fears fade

(MENAFN- AFP) Oil prices edged lower in Asia Thursday on fading fears that conflicts in crude producers Libya and Iraq could result in a major supply disruption, analysts said.

US benchmark West Texas Intermediate for October delivery was down 27 cents at $93.18 while Brent for October eased 26 cents to $102.02 in afternoon trade.

"Benchmark prices weakened further as there has been no disruptions in crude supply despite ongoing crises in Iraq and Libya," said Sanjeev Gupta, head of the oil and gas practice at consultancy EY.

In Iraq, the OPEC cartel's number-two producer, US air strikes that began on August 8 have pinned back the Islamic State group who have overrun large swathes of the country's north and west as well as parts of Syria.

US President Barack Obama on Wednesday demanded the world take firm action against the "cancer" of jihadist extremism in Iraq and Syria, a day after the militants released a video showing the beheading of US reporter James Foley.

The jihadist expansion has not affected oil production in Iraq's south, where most of its oil infrastructure is situated. Supply to neighbouring Turkey and Jordan has however been disrupted.

In Libya, output has been increasing in the vital oil sector despite ongoing fighting between Islamist militia and government forces.

Mohamed Hrari, spokesman for Libya's National Oil Corporation, said production on Monday reached 550,000 barrels a day, from around 400,000 barrels previously.

Output in the north African state, an OPEC member, had been severely limited for a year after rebels last summer blockaded terminals as part of a campaign to restore autonomy in the country's eastern region.

The terminals were reopened after Tripoli struck a deal with the rebels in April.

Gupta said investors will next focus on a three-day meeting of US and European central bank heads in Jackson Hole, Wyoming that begins Thursday.

"The market is looking for clues from the outcome of the two-day meeting of the world's top central bankers, who will air their views on central bank policies and labour market situation this weekend in the US," Gupta said.

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