Brent edges down as Libyan oil supply concerns ease

The front-month ICE Brent contract has dipped by $0.18/bbl on the day, to trade at $71.95/bbl at 09.00 GMT.

PHOTO: Brent crude price chart. Getty Images

Upward pressure:

US commercial crude oil inventories fell sharply by 4.47 million bbls to 413 million bbls on 20 September, according to the US Energy Information Administration (EIA) data released this week. This decline in crude stocks supported Brent futures.

Brent's price gained further support after China's central bank reduced interest rates and injected liquidity into the banking system, to boost the country's economic growth towards its target of approximately 5%.

Downward pressure:

Oil prices felt some downward pressure amid hopes that disruptions in Libyan oil supply could be resolved sooner than anticipated.

Rival factions competing for control of the Central Bank of Libya reached an agreement on Thursday to end their dispute. Representatives from Libya's eastern and western legislative bodies, in UN-mediated talks, signed a deal nominating an interim governor and deputy to resolve the crisis over the central bank's leadership. The country's central bank is the only globally acknowledged depository of its oil revenues.

Additionally, the Organization of Petroleum Exporting Countries (OPEC) and its allies, collectively known as OPEC+, plan to move forward with increasing production by 180,000 b/d each month starting in December, according to a Reuters report. The news has added downward pressure on Brent futures.

By Tuhin Roy

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