Oil prices declined on Monday for a second session after Libya resumed production over the weekend, while China, the world’s largest importer of crude oil, is expected to release economic data indicating that the post-pandemic recovery is faltering.
Brent crude futures fell 57 cents, or 0.7%, to $79.30 per barrel as of 0055 GMT, while U.S. West Texas Intermediate crude stood at $74.90 per barrel, a decline of 52 cents, or 0.7%.
Prices weakened after both benchmarks recorded a third consecutive week of gains last week, reaching their highest levels since April when production at oil fields in Libya was halted, and Shell suspended the export of Nigerian crude oil, tightening the supply.
Two out of three Libyan oil fields that were shut down on Thursday, the Sharara and El Feel oil fields with a total production capacity of 370,000 barrels per day (bpd), resumed operations on Saturday evening, according to four oil engineers and the oil ministry.
The 108 field remained closed. Production was halted in protest against the kidnapping of a former finance minister.
In Russia, oil exports from western ports are set to decline by around 100,000-200,000 bpd next month compared to July, a sign that Moscow is fulfilling its commitment to further restrict supply along with OPEC leader Saudi Arabia, said two sources on Friday, citing export plans.
On the economic front, stronger-than-expected consumer sentiment figures in the U.S. on Friday tempered expectations that the Federal Reserve will end its cycle of interest rate hikes at the Federal Open Market Committee (FOMC) meeting next week, according to IG analyst Tony Sycamore.
There is also some nervousness among traders in anticipation of another big week of economic data from China, the UK, and Japan, he added.
“All this data will play a role in determining the next move for three major central banks, the PBOC, BoE, and BoJ, and therefore whether the demand for oil will receive an impetus,” Sycamore said.