Oil prices ticked lower Monday as traders digested reports that halted
Libyan oil production could resume and cashed in their profits after
prices hit two-month highs Friday.
Light, sweet crude for February delivery fell 53 cents, or
0.5%, to $99.79 a barrel on the New York Mercantile Exchange. Brent
crude on ICE Futures Europe dropped 92 cents, or 0.8%, to $111.26 a
barrel.
Libya's national oil company, the Arabian Gulf Oil Co.,
resumed some oil field and refinery operations Sunday, the company
announced on its website. However, the company did not announce a
reopening of the Marsa al-Hariga export terminal.
Labor unrest has disrupted Libyan oil exports, cutting crude
supplies to Europe and boosting global oil prices since last summer. The
country currently is pumping around 250,000 barrels a day, down sharply
from more than 1.5 million barrels a day last spring.
"Libya is trying to ramp up some output," which could increase
global oil supplies, said John Kilduff, founding partner of Again
Capital in New York. "That's what's knocked Brent down in particular
this morning."
Brent, the global benchmark, is more sensitive to geopolitical
supply concerns than West Texas Intermediate oil, the U.S. benchmark.
U.S. oil prices surged above $100 a barrel for the first time
in two months Friday after a government storage report showed more
robust demand for crude oil and petroleum products than analysts had
expected.
Traders are now cashing in their profits, pushing prices back below $100 a barrel, Mr. Kilduff said.
However, "this pullback is short-lived," he said. "We've got a
strong demand environment here, with the high run rate of the
refineries nationwide and the strong product demand that we're seeing
for diesel fuel and gasoline."
Front-month January reformulated gasoline blendstock, or RBOB,
recently traded down 1.8 cents, or 0.6%, to $2.7981 a gallon. The
January contract expires Tuesday. The more-actively traded February
contract fell 1.63 cents, or 0.5%, to $2.7932 a gallon.
January diesel slipped 1.36 cents, or 0.4%, to $3.1106 a
gallon. The February contract slid 1.65 cents, or 0.5%, to $3.0756 a
gallon.