Oil Pauses After Strong Week

02/26/18 07:04 AM EST
By Christopher Alessi 

LONDON--Oil prices edged down Monday morning, but largely held on to gains made last week on the back of halted production at a Libyan oil field and an unexpected drop in U.S. crude stockpiles.

Brent crude, the global benchmark, was down 0.1% at $67.20 a barrel on London's Intercontinental Exchange. On the New York Mercantile Exchange, West Texas Intermediate futures were down 0.1%, at $63.48 a barrel.

Oil prices have gained more than 7% over the past two weeks, following a more than 12% selloff at the start of the month amid fears of surging U.S. shale production.

Meanwhile, Libya's National Oil Co. on Friday declared force majeure on exports from the el-Feel oil field in the south of the country. The 60,000 barrel-a-day field was shut down and evacuated following a violent protest by a unit of local guards.

"Given the ongoing political situation in the country, production levels may remain volatile," Jan Edelmann, a commodities analyst at HSH Nordbank AG, said of reduced supply out of Libya.

Meanwhile, the U.S. Energy Information Administration said Thursday the amount of crude oil in storage fell by 1.6 million barrels in the week ended Feb. 16. The surprise decline followed weeks of crude inventory builds in the U.S. that, along with rising production, had weighed on prices.

"Total U.S. commercial oil stocks subsequently dipped below the five-year average for the first time in nearly four years," according to Stephen Brennock, an analyst at brokerage PVM Oil Associates Ltd.

Prices have also been supported by ongoing rhetoric from the Organization of the Petroleum Exporting Countries and its partners about its commitment to cutting crude production.

OPEC and 10 producers outside the oil cartel, including Russia, have been holding back crude output by 1.8 million barrels a day since the start of last year. The agreement, which is scheduled to last through the end of 2018, helped bolster crude prices by more than 50% in the second half of last year.

Among refined products, Nymex reformulated gasoline blendstock--the benchmark gasoline contract--was up 1.5%, at $1.99 a gallon. ICE gasoil, a benchmark for diesel fuel, changed hands at $594.75 a metric ton, up 0.6% from the previous settlement.

Write to Christopher Alessi at christopher.alessi@wsj.com


(END) Dow Jones Newswires

February 26, 2018 07:04 ET (12:04 GMT)

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