Oil prices pulled back Tuesday morning, despite ongoing talk of possible production curbs in Libya and Nigeria and news of shrinking U.S. stockpiles.
Brent crude LCOU7, -0.68%, the global benchmark, fell 0.5%, to $46.63 a barrel, in London midmorning trading. On the New York Mercantile Exchange, West Texas Intermediate futures CLQ7, -0.68% were trading down 0.5%, at $44.16 a barrel.
“The situation remains unstable,” said Eugen Weinberg, head of commodity research at Commerzbank. Markets, he said, remain “a bit on the bearish side.”
Prices fell 6% in the three sessions ending last week before beginning a tepid recovery Monday during U.S. trading, boosted by news that the Organization of the Petroleum Exporting Countries could pressure Nigeria and Libya to curb oil production.
Both are members of OPEC but exempt from the group-led agreement to cut global output by 2%. The exemption was meant to allow their production to rebound following years of fighting between the countries’ governments and local insurgents, which blunted output. In recent months, production has risen strongly, offsetting some one-third of the cuts made so far this year by the cartel and its allies.
The output-cap exemptions for Libya and Nigeria have drawn ire from some fellow producers, and the issue is expected to be discussed when OPEC’s monitoring panel meets on July 24 in Moscow.
Source: Commerzbank commodity research public statement.