Brent oil prices dropped sharply in Asian trade on Tuesday. This drop follows a demand shortfall in China, the world’s biggest importer of crude. The slow demand from China is as a result of the sluggish economic growth that the country is currently experiencing. Also, the halt of production and exports from Libya has reduced demand for the product.
Brent crude dropped 37 cents to $77.15 a barrel. These losses follow a 0.3% drop in Brent crude and a 1.7% decline in WTI last week.
Both Brent and WTI crude have experienced losses for two consecutive months as economic concerns in China and the U.S. overshadowed disruptions in Libyan supply and rising geopolitical tensions in the Middle East.
Oil exports at Libyan ports remained halted on Monday and production curtailed.
According to reports, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, will proceed with the planned increase in oil production starting in October.
Total production had plunged to little more than 591,000 bpd as of Aug. 28 from nearly 959,000 bpd on Aug. 26, NOC said. Production was at about 1.28 million barrels per day on July 20.
Libya’s National Oil Corp (NOC) said on Monday it had declared force majeure on its El Feel oil field from Sept. 2. The U.S.
Energy Information Administration data released Friday showed that U.S. oil consumption slowed in June to its lowest seasonal level since the COVID-19 pandemic in 2020.
Intensifying supply concern, two oil tankers were attacked on Monday in the Red Sea off Yemen however did not sustain significant damage. The Iran-backed Houthis claimed duty.
In Libya, the Arabian Gulf Oil Company has resumed production of up to 120,000 barrels per day to meet local needs, while exports remain halted.
