Oil prices dropped today after Libyan rebels occupying four eastern oil ports agreed with the government to gradually end the eight-month old blockade, which could clear way for release of fresh supplies into market.
Brent crude slipped by 85 cents to $105.87 a barrel, while US oil was down by 42 cents to $100.72, reported Reuters.
Crude prices dropped after The Libyan Government said Zueitina and Hariga ports are set to open immediately, which are held by federalist rebels demanding more autonomy from Tripoli.
The government also said that other two larger ports, Ras Lanuf and Es Sider, will open in two to four weeks following further discussions between rebels ending.
Ending the oil port standoff could release 600,000bpd of crude supplies and will be a major advance for Libya’s fragile government, which has struggled to assert its authority in the country after nearly three years after the fall of Muammar Gaddafi.
Further drop in crude prices were supported by data showing strong jobs growth in the US, where manufacturing and services sector activity in automobile sales have signalled strength as the first quarter ended.
Oil prices will get some support in the near future as the promising economic indicators, which are set to boost expectations of strong gasoline sales as the US, the world’s top oil consumer, enters the peak summer driving season.
Traders are now keeping an eye on how much oil Libya will start exporting and also assessing US gasoline demand to gauge the outlook for oil.
Investors are keeping a close watch on Iranian oil as the country is hoping to get a relief from Western sanctions.
The US has dismissed speculations that the country is exporting more oil than agreed, much to the relief of Iran, ahead of a new round of senior-level negotiations between Iran and the US, Britain, France, Germany, China and Russia on 8-9 April in Vienna.
Image: Top Libyan rebel leader Ibrahim Jathran confirmed the blockage of Zueitina and Hariga ports had ended. Photo: courtesy of Michelle Meiklejohn.