Oil pulls back from highs as investors mull production outage in Libya

Oil prices edged lower on Wednesday, a day after reaching levels not seen in more than 2 years after a pipeline explosion in Libya.

February West Texas Intermediate oil on the New York Mercantile ExchangeCLG8, -0.80%  was down 24 cents, or 0.4%, at $59.73 a barrel. February BrentLCOG8, -1.18%  fell 33 cents, or 0.5% to $66.71 a barrel.

WTI oil prices hit a 2 1/2-year high on Tuesday, while Brent crude rose 2.7% after an explosion at a pipeline that connects crude-oil fields to Es Sider oil terminal. Libya’s state-owned National Oil Corporation said it expects a production loss of 70,000 to 100,000 barrels a day.

The pipeline blast in Libya was a reminder of the headline risk now facing the oil market with OPEC-led production caps remaining in place for 2018 as oil inventories have started falling globally. A 5th-straight weekly drop is anticipated to be reported by the U.S. later this week, according to a survey of analysts by S&P Global Platts.

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