The oil price slid by over 6% Wednesday, after Libya announced it would increase its output after reopening four of its oil ports. Libya’s National Oil Corp. (NOC) said it planned to lift the force majeure on a number of its oil export terminals and ramp up produciton.
The price of Brent crude oil fell 6.9% to trade at $73.40 per barrel Wednesday. That’s the worst single-day performance since February 2016.
However, there has been a mild recovery Thursday, with the price of Brent crude rising 1.68% to €74.63 per barrel. The price of US WTI oil is also on the up Thursday, rising 0.78% to move above the $70 per barrel level, once again.
Libyan oil output back online
The loss of millions of barrels of Libyan oil had been one of the major reasons behind the recent upward pressure on the price of the valuable commodity. However, the NOC ended that with its announcement that the country would one again begin to produce and export its oil.
“Production and export operations will return to normal levels within the next few hours,” the NOC said in a statement Wednesday.
That was a relief to the market and saw prices slide, even though US oil stock data showed a steep drop in US crude oil stock piles.
OPEC reports increased output
Another detail that likely supported Wednesday’s oil price drop was confirmation from OPEC that output among its members had risen, in line with the outcome of its recent Vienna meeting.
OPEC figures show that Saudi Arabian oil production rose by almost 500,000 barrels per day in June to 10.5 million barrels per day.
Indeed, output from OPEC increased 173,000 barrels per day over June as a whole as the 15-member oil producing group takes the first steps to ending its oil output cap that had been in place for over a year.
In addition, while OPEC said it expects global oil demand to rise beyond 100 million barrels per day in 2019, it also warned that ongoing trade tensions cold have a negative impact on the global oil market.