Oil prices steady, rebounding Libyan production weighs

April 3, 2017 09:57 AM

Oil futures held steady on Monday as a rebound in Libyan oil production over the weekend weighed against upbeat economic data from Asia that pointed to strong energy demand from the region.

International benchmark Brent futures climbed 4 cents to $53.57 a barrel by 0952 GMT (5:52 a.m. ET).

U.S. West Texas Intermediate crude futures were 8 cents higher at $50.68 a barrel. 

Libya's Sharara oilfield, the country's largest, resumed production on Sunday after a week-long disruption and state-owned NOC lifted force majeure on loadings of Sharara crude on Monday, sources told Reuters.

The field was producing around 80,000 barrels per day (bpd) on Sunday and about 220,000 bpd prior to the March 27 shutdown.

"The main development over the weekend is the restart of Sharara," managing director of PetroMatrix Olivier Jakob said. 

Uncertainty about how Libyan output would fare in the months ahead added short-term volatility to oil prices, he said. "(It) is a swing factor that can make it move both ways if one looks at the balances for the second half of the year." he added.

Adding to pressure on prices, energy services firm Baker Hughes said the U.S. rig count rose by 10 to 662 last week, making the first quarter the strongest for rig additions since mid-2011 and raising prospects for more U.S. shale oil.

Rising supplies tempered data from Asia that suggested the region's buoyant economy would ensure solid demand for energy.

Manufacturing data showed factories across much of Asia posted another month of solid growth in March.

Purchasing managers' index (PMI) data from China showed its factories expanded for a ninth straight month in March, although the pace slipped as new export orders slowed.

"The China PMI figures were pretty positive. They provide background support for oil prices," chief market analyst at Sydney's CMC Markets Spooner said.

Oil prices had rallied for three days last week, lifted by reduced Libyan output and helped by expectations that members of the Organization of the Petroleum Exporting Countries (OPEC) and other non-OPEC producers such as Russia would extend production cuts beyond June.

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