Oil prices up a little as Libya output keeps rising

Libya’s oil output soars as OPEC set to consider new cuts strategy [Photo: Reuters]

Oil traded near $46 a barrel after snapping a five-day gain on concern output in the U.S. and OPEC member Libya is growing just as demand shows signs of improvement.

Futures were little changed in New York after sliding 1.1 percent Monday, paring last week’s 5.2 percent gain. Output from major U.S. shale plays will reach 5.58 million barrels a day in August, an all-time high, the Energy Information Administration said in a report. Libya has increased production to 1.1 million barrels a day, according to a person familiar with the matter, Bloomberg reported.

Libya, which is exempt from an output-cut deal between the Organization of Petroleum Exporting Countries and its allies to shrink a glut, is boosting production as prices in New York languish below $50 a barrel on concern ample global supplies will offset OPEC’s curbs. That’s at a time of the year when demand for gasoline typically increases as Americans take more driving vacations during the summer, added Bloomberg.

“Capping Libya’s production is currently being discussed, so we shall see if they end up participating in the output-cut deal,” Min Byungkyu, a global market strategist at Yuanta Securities Co., said by phone in Seoul. “Looking at the big picture, the global oil market is in the gradual process of rebalancing with demand starting to rise faster than supplies.” According to Bloomberg.

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