Singapore | Oil prices recovered Tuesday but stayed near two-month lows as increased US drilling, a strong dollar and hints of higher production by Iran and Libya brought worries about a global glut back into focus. The commodity has retreated since last month hitting above USD 52 a barrel as supply disruptions in Nigeria and Canada eased and the fall in US output slowed.
The US dollar strengthened after Britain voted in late June to leave the European Union, hitting demand in countries with weaker currencies. At about 0315 GMT, US benchmark West Texas Intermediate was 10 cents higher at USD 44.86 while Brent was 13 cents up at USD 46.38.
Tehran plans to double crude exports so long as the rise in shipments is absorbed by global markets, according to a senior official at state-run National Iranian Oil Co, Bloomberg News reported. Iran is now exporting about two million barrels of its daily output of 3.8 million, said Mohsen Ghamsari, director of international affairs at the national oil firm. It has regained about 80 per cent of the market share it held before nuclear-linked western sanctions were imposed on its oil industry in 2012, Ghamsari said. The sanctions were lifted in January this year after a deal with the international community over its nuclear programme.
Also, Libya’s state producer is seeking to reopen oil ports and restore output, according to its chairman. Some of the news coming out of Libya is showing signs that perhaps production could be set to begin picking up there again, said Angus Nicholson, a markets analyst in Melbourne at IG Ltd, Energy information provider S&P Global Platts said in a report that with the US summer driving season peak already over, inventories in the country will soon face upward pressure.
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