Oil prices increased today but headed towards a biggest weekly fall in six months, following the restart of a key Libyan oilfield, fearing a drop in oil demand.
Crude prices dropped after Libyan National Oil (Noc) announced the resumption of oil production from the key El Sharara field after protesters ended a two-month blockade.
The resumption of the southern field is set to lift output to 600,000 barrels a day, where Libya’s output has fallen to 250,000bpd from 1.4m in July.
The El Sharara field was blocked from since the end of October and now hopes to reach the field’s maximum output capacity of around 340,000bpd within two to three days after starting with 60,000bpd.
Prices were dragged by the Energy Information Administration weekly data which revealed that distillate stocks in the US rose 5m barrels to their highest level in just over two months, as demand for the fuel took a hit while production approached record highs.
Strengthening of the dollar and concerns over slowing growth in China also played a role in oil prices drop.
Currently the crude prices are positive as a different set of protesters in Libya started blocking an oil pipeline in the west to the Mellitah export port, co-operated by Italy’s Eni.
Development in South Sudan has supported the Brent value as the country’s oil production remained a concern even after the government and rebels last week agreed to peace talks.
Three weeks of fighting have left more than a thousand people dead and disrupted oil supply from the African country.
Image: Libya resumes El Sharara oilfield after protesters ended a two-month blockade. Photo: courtesy of Rawich.