Oil prices fell by around 1% in early Asian trade on Monday after major Libyan oilfields resumed production over the weekend following a brief shutdown and after China reported second-quarter economic growth below expectations.
In the morning in Europe, the U.S. benchmark WTI Crude was trading down by 0.98% at $74.68 per barrel, while the international benchmark, Brent Crude, traded below the $80 per barrel mark it had reached last week for the first time since May. Brent was down by 0.96%, at $79.10.
Underwhelming Chinese GDP data weighed on the oil market, again, after the world’s second-largest economy and top crude oil importer reported early on Monday 6.3% GDP growth for the second quarter, missing expectations of 7.3% growth and slowing quarter-on-quarter. GDP in the second quarter rose by just 0.8% compared to the first quarter, after 2.2% quarterly growth in the first quarter.
The economic growth miss from China added to the return to production of large Libyan oilfields to weigh on oil prices on Monday.
Last Friday, Libya’s largest oilfield, Sharara, was fully halted amid protests on Friday as tensions in the restive African OPEC producer returned. The El Feel oilfield close to Sharara was also affected and was also stopped. Combined, the Sharara and El Feel oilfields in southwestern Libya pumped around 350,000 bpd of crude oil before the stoppage.
The halting of production at the fields was the result of protests by the Al-Zawi tribe over the kidnapping of Faraj Bumatari, a former finance minister.
Bumatari has been released, tribal leader Al-Senussi Al-ahlaiq told Reuters, which led to the resumption of production at Sharara and El Feel.
Libya lost 340,000 barrels in production due to the closures, Oil Minister Mohamed Aoun told Dubai-based Asharq TV this weekend.
The oil ministry warned that Libya would lose market share due to the on-and-off supply.
“The loss of confidence in the continuity of Libyan oil supply to the global market will result in a loss of market share for Libyan oil and decreased demand for it,” the ministry said in a statement carried by Reuters.
By Tsvetana Paraskova for Oilprice.com
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