U.S. oil hits 9-Month low as Libya, Nigeria supply growth weighs
Oil prices tumbled to a nine-month closing low Tuesday on growing supplies out of Libya and Nigeria, hitting shares of Dow Jones industrial average components Exxon Mobil (XOM) and Chevron (CVX).
U.S. crude settled 2.2% lower at at $43.23 a barrel after dipping below $43 intraday. Oil is now in bear territory. But prices edged up a bit after the close as inventory data from the American Petroleum Institute showed a drawdown of 2.7 million barrels last week, more than estimates.
Libyan oil production rose by more than 50,000 barrels per day (BPD) to 885,000 barrels per day, after ending a dispute with a German oil company that opened two more fields, according to a Reuters source.
Libya is exempt from the current OEPC and top non-OPEC producer deal to remove 1.8 million barrels of crude per day from the market to help boost oil prices.
Exports from Nigeria, also exempt from the output cut, are expected to hit 226,000 BPD in August vs. 164,000 BPD in July, according to Reuters figures.
Exxon Mobil shares closed down 0.5% on the stock market today, and Chevron lost 0.9%. BP dropped 2.9% and, Royal Dutch Shell fell 2.2%.
An uptick in U.S. production or stockpiles could send oil crashing even further. Later Tuesday, the American Petroleum Institute will release its weekly U.S. stockpile figures. And on Wednesday, the Energy Information Administration will release official weekly domestic production and inventory data.
But a Bloomberg survey found that analysts expect U.S. stockpiles to fall by 1.2 million barrels in the prior week.
