Brent crude sunk below $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 1.2 percent after slipping 0.5 percent 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. U.S. East Coast gasoline supplies rose to a record as the 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 U.S. output. American 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 U.S. drillers bringing back rigs removes the global supply disruptions which have recently been the main driver of oil’s recovery,” Kang Yoo Jin, a Seoul-based commodities analyst at NH Investment & Securities Co., said by phone. “Lower-than-expected gasoline demand in the U.S., despite the summer driving season, is also adding downward pressure on oil prices.”
Brent for September settlement fell as much as 58 cents to $49.52 a barrel on the London-based ICE Futures Europe exchange and traded at $49.56 a barrel at 1:24 p.m. Singapore time. The contract lost 25 cents to $50.10 on Monday. The global benchmark crude was at a 67-cent premium to WTI for September delivery.
OPEC Output
West Texas Intermediate for August delivery was at $48.19 a barrel on the New York Mercantile Exchange, down 80 cents, from Friday’s close. There was no settlement Monday because of the Independence Day holiday in the U.S.
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 U.S. 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.
Oil-market news:
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 most of its crude production is as entrenched as ever. Lebanon may 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.