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Oil prices fall as weak demand overshadows Libya blockade
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Oil prices fall as weak demand overshadows Libya blockade
Sep 2, 2024 7:53 PM

BEIJING, Sept 3 (Reuters) - Brent oil prices slid in

Asian trade on Tuesday as concern about a sluggish economy in

China bringing down demand outweighed the impact of a blockade

of oil production facilities in Libya.

Brent crude futures were down 37 cents, or 0.48%, to

$77.15 a barrel by 0156 GMT.

U.S. West Texas Intermediate crude, which did not

have a Monday settlement because of the U.S. Labour Day holiday,

was 28 cents up from its Friday close of $73.55.

"Oil remains under pressure given lingering Chinese demand

concerns. Weaker than expected PMI data over the weekend would

have done little to ease these worries," said Warren Patterson

of ING.

China's purchasing managers' index (PMI) hit a six-month low

in August. On Monday, China posted the first decline in new

export orders in eight months in July, and said new home prices

grew in August at their weakest pace this year.

"These demand jitters are clearly more than offsetting the

supply disruptions from Libya," Patterson said.

The United Nations Support Mission in Libya said it held

talks on Monday to resolve a dispute over control of the central

bank that triggered a blockade of the country's most valuable

commodity, sending oil production to less than half of its usual

level.

Rival factions concluded a draft agreement and aimed to sign

it on Tuesday, the UN said without providing further details.

Oil exports at Libyan ports remained halted on Monday and

production curtailed, six engineers told Reuters.

Libya's National Oil Corp (NOC) said on Monday it had

declared force majeure on its El Feel oil field from Sept. 2.

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 (bpd) on

July 20.

Eight members of the Organization of the Petroleum Exporting

Countries and affiliates, known as OPEC+, are scheduled to boost

output by 180,000 bpd in October, a plan industry sources said

is likely to go ahead regardless of demand worries.

"There are suggestions they will stick to their planned

increase, however much will depend on how much more weakness we

see in the market," said ING's Patterson.

A Reuters survey on Monday found global oil output last

month fell to its lowest level since January.

Exacerbating supply concern, two oil tankers were attacked

on Monday in the Red Sea off Yemen but did not sustain major

damage. The Iran-backed Houthis claimed responsibility.

Also, Russia's Gazpromneft Moscow refinery suspended

operations at one unit for repairs. A fire broke out on Sunday

after a drone strike at the plant, which processed 11.6 million

tons of crude oil last year.

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