Oil fell to a one-month low in New York on speculation that the resumption of shipments from Libya and Nigeria might add to the global surplus.
Futures dropped as much as 2.7 per cent on the New York Mercantile Exchange. Libya and Nigeria, whose supplies have been reduced by domestic conflicts, are preparing to boost exports within weeks, Bloomberg reported.
A tanker that’s supposed to collect crude from a key Libyan terminal for the first time in almost two years should load today or Saturday.
The oil surplus will last longer than previously thought, the International Energy Agency said on Tuesday.
Oil has fluctuated since rallying in August amid speculation that the Organisation of Petroleum Exporting Countries and Russia would agree on measures to stabilise the market at a meeting in Algiers later this month.
All 14 members will attend the September 27 meeting, according to an official with knowledge of the plans.
“The headlines about Libya restarting shipments from a closed port are sending us lower,” a senior market analyst at Price Futures Group in Chicago, Phil Flynn, said.
“Increased shipments are going to add to the global glut.”
World oil stockpiles will continue to accumulate through 2017, a fourth consecutive year of oversupply, according to the IEA.
Just last month, the agency predicted the market would return to equilibrium this year.
Meanwhile, Nigeria will resume exports of its Qua Iboe grade by the end of September, targeting shipments of 200,000 barrels a day, according to the Nigerian National Petroleum Corporation.