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Oil prices fall as production resumes in Libya

MOSCOW, July 22 – PRIME. Oil quotes are falling on Friday during the European session due to the deterioration in the outlook for global demand and the resumption of supplies of Libyan oil.

Scholz: Russia can supply contractual volumes of gas through pipelines

As of 1023 GMT, NYMEX Brent futures fell $1.02 to $102.84 a barrel, while WTI futures fell $1.08 to $95.27 a barrel.

A significant slowdown in global economic activity looks increasingly likely as central banks aggressively raise interest rates from extremely low levels.

“The economic front is tough, but there is still a shortage of supply, which means buying activity in the physical market will support prices given the uncertain geopolitical outlook,” said Steven Innes of SPI Asset Management.

According to him, the focus of investors is the meeting of the US Federal Reserve System (FRS), which will be held next week. Central bank officials signaled their intention to raise interest rates by 75 basis points following the July 26-27 meeting.

“The declaration of intent will be very important, and any easing of the monetary policy outlook will be a good sign for global economic growth,” Innes added.

Signs of weakening demand for oil in the US have a negative impact on oil quotes, but the lack of supply in the world market is supporting prices.

Fears about the supply outlook eased slightly after the resumption of production at several fields in Libya earlier this week.

“The pace of production in Libya is recovering, but no one can know how long this will last, given” the political situation in the country, said UBS analyst Giovanni Staunovo.

Preliminary estimates of OPEC production volumes will be presented next week, and this will have an impact on the further dynamics of oil prices, adds Staunovo.

WTI oil quotes have been declining over the past two sessions on data indicating a drop in demand for gasoline in the US by almost 8% compared to the same period last year due to record high prices.

Signs of strong demand in Asian countries have put upward pressure on Brent oil quotes, which may demonstrate growth for the first time in six weeks.

Demand for gasoline and distillates in India hit record highs in June despite higher prices. Oil products consumption in the country increased by 18% in June compared to the same period of the previous year, and the workload of refineries in India is also approaching record highs, RBC analysts say.

“This is a sign of a more than strong recovery in activity after the pandemic,” concludes RBC analyst Michael Tran.

Source: 1prime

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