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Brent crude prices fall amid weak Chinese demand, disruption of Libyan production
(MENAFN) On Tuesday, Brent crude prices experienced slight declines during Asian trading as concerns over weakened demand from China overshadowed the effects of disrupted oil production in Libya. Brent crude futures fell by 37 cents, or 0.48 percent, settling at USD77.15 per barrel as of 0156 GMT. Meanwhile, U.S. West Texas Intermediate (WTI) crude, which was not traded on Monday due to the U.S. Labor Day holiday, saw a modest increase of 28 cents from the previous Friday’s close, reaching USD73.55.
The drop in Brent crude prices is largely attributed to ongoing worries about diminishing demand from China. ING's Warren Patterson highlighted that weaker-than-expected Purchasing Managers' Index (PMI) data from China has exacerbated these concerns. China's PMI fell to a six-month low in August, while new export orders experienced their first decline in eight months, and new home prices grew at the slowest pace of the year in August. These factors have contributed to a prevailing sentiment that demand issues are outweighing the supply disruptions caused by the situation in Libya.
Despite the significant disruptions in Libya's oil production due to a crisis at the central bank, which has reduced output to less than half of its usual level, the impact on oil prices has been subdued. The United Nations Support Mission in Libya reported that discussions in Tripoli aimed at resolving the crisis had led to "important understandings" among the parties involved. However, oil exports from major Libyan ports remain halted, and production continues to be low, according to reports from engineers on the ground.
The drop in Brent crude prices is largely attributed to ongoing worries about diminishing demand from China. ING's Warren Patterson highlighted that weaker-than-expected Purchasing Managers' Index (PMI) data from China has exacerbated these concerns. China's PMI fell to a six-month low in August, while new export orders experienced their first decline in eight months, and new home prices grew at the slowest pace of the year in August. These factors have contributed to a prevailing sentiment that demand issues are outweighing the supply disruptions caused by the situation in Libya.
Despite the significant disruptions in Libya's oil production due to a crisis at the central bank, which has reduced output to less than half of its usual level, the impact on oil prices has been subdued. The United Nations Support Mission in Libya reported that discussions in Tripoli aimed at resolving the crisis had led to "important understandings" among the parties involved. However, oil exports from major Libyan ports remain halted, and production continues to be low, according to reports from engineers on the ground.
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