Brent crude sunk below US$50 a barrel as estimates showed Nigerian production rose last month, following repairs to infrastructure that had been damaged by militant attacks.
Futures in London dropped as much as 1 percent after slipping 0.5 percent on Monday.
Nigeria pumped an average of 1.53 million barrels a day last month, an increase of about 90,000 a day from May, according to a Bloomberg survey.
US east coast gasoline supplies rose to a record as the US Energy Information Administration said consumption of the fuel in April was less than estimated in weekly reports.
Crude has risen this year, with Brent gaining more than 75 percent from a 12-year low in January, amid supply disruptions and falling US output. US shale drillers have brought back the most oil rigs of any week this year amid expectations of a stabilizing market.
“Nigeria raising its output and US drillers bringing back rigs removes the global supply disruptions which have recently been the main driver of oil’s recovery,” Seoul-based NH Investment & Securities Co commodities analyst Kang Yoo-jin said by telephone. “Lower-than-expected gasoline demand in the US, despite the summer driving season, is also adding downward pressure on oil prices.”
Brent for September settlement fell as much as US$0.48 to US$49.62 a barrel on the London-based ICE Futures Europe exchange and traded at US$49.69 a barrel at 12:30pm Seoul time. The contract lost US$0.25 to US$50.10 on Monday. The global benchmark crude was at a US$0.67 premium to WTI for September delivery.
West Texas Intermediate for August delivery was at US$48.34 a barrel on the New York Mercantile Exchange, down US$0.65, from Friday’s close. There was no settlement on Monday because of the Independence Day holiday in the US.
Production in Saudi Arabia, the world’s biggest crude exporter, rose to 10.33 million barrels a day, a monthly gain of 70,000 a day. The kingdom typically boosts output in summer months as it burns more crude to generate electricity to power air conditioners. Libya boosted output in June by 40,000 barrels a day to 320,000.
Gasoline stockpiles along the US East Coast surged to a record 72.5 million barrels in the week ended June 24, EIA data show. Imports to the region jumped to a six-year seasonal high. Production climbed to a record in the previous week, as refiners typically run harder in the second quarter to meet summer peak driving season.
The end of a split in Libya’s National Oil Corp marks a small step toward healing the divided country, but the political stalemate that shut down of most its crude production is as entrenched as ever. Lebanon might soon approve measures to push ahead with a stalled first auction of offshore oil and natural gas rights, ending years of political wrangling as it tries to catch up in a regional race to tap energy wealth in the eastern Mediterranean.
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