Oil prices retreated during the Asian trading session following concerns about a China-US trade war and the return of Libyan oil to the market, which continued to be cited as a catalyst for the selling.
On Wednesday, Libya’s National Oil Corp announced that 4 exports terminals were being reopened and allowed the return of as much as 850 K bpd of oil into the markets, effectively ending a stand that had shut down the majority of Libya’s oil output. On the other hand, the International Energy Agency has increased expectations for a global shortage in crude supplies as the energy watchdog warned of a potential capacity crunch amid a rise in output from Middle East Gulf countries and Russia, helping oil prices to recoup some losses.
Saudi Arabia has increased its production level to 430 K bpd for the month of June according to the EIA. However, this increase has been countered by the decrease in Iranian exports, while European traders reduced their imports ahead of US sanctions on Tehran, which will come into effect in November.
Oil prices traded lower during the European trading session as concerns about a China-U.S. trade war and the return of Libyan oil to the market offset a warning about a shortage in global crude supplies despite increases in production from the Organization of Petroleum Exporting Countries.
Crude oil prices were trading fairly quiet at the moment despite the pummeling it suffered on Wednesday. Crude oil markets are seen stabilized during the current trading session as the $70 level has offered some psychological support, but it won’t mean that it could hold on to this level for long.
New York-traded WTI crude futures trade at $70.00 a barrel. Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S. trades at $73.60 a barrel.