Oil prices dropped today after a rebel group in eastern Libya agreed with the government to lift the seizure of vital oil ports within days, which weighed on crude demand.
Brent crude dropped by $0.04 to $105.58 a barrel, while US oil was down by $0.18 to $99.56, reported Reuters.
Crude prices dropped after the rebel group’s senior leader Ibrahim Jathran said that they have come to end the blockade of ports for the benefit of Libyans, which raised hopes for an end to an eight-month stalemate that has dried up state income and caused chaos.
The government delegation is expected to meet the group at their home base of Ajdabiya in eastern Libya to finalise the details of the deal.
Oil was also weighed down by poor manufacturing data from China and Europe, with manufacturing activity in China shrinking for a third straight month.
According to the surveys, factory activity across Europe eased off in March, which also kept a check on oil price gains.
But further decline in oil prices was cut as Reuters’ survey showed that the Organisation of the Petroleum Exporting Countries’ (OPEC) oil output may drop drastically in March, due to Iraq’s oil revival setback and reduced output from African oil producers.
Crude prices also received support from the American Petroleum Institute (API) data, which showed that US crude stocks dropped by 5.8 million barrels to 373.5 million barrels in the week ending 28 March.
API data also showed that crude stocks at the delivery hub in Cushing, Oklahoma, fell by 1.5 million barrels and gasoline inventories rose where distillate stocks fell.
Image: The leader of a rebel group in eastern Libya has agreed to end the seizure of several oil-exporting ports within days. Photo: courtesy of Feelart.