Worries over global stock markets and doubts that planned output cuts led by producer club OPEC will be enough to rein in oversupply were swirling around vis-à-vis oil prices were under pressure on Tuesday
But traders said crude prices received some support after Libya’s National Oil Company (NOC) declared force majeure on exports from the El Sharara oilfield, the country’s biggest, which was seized last weekend by a militia group.
NOC said the shutdown would result in a production loss of 315,000 barrels per day (bpd), and an additional loss of 73,000 bpd at the El Feel oilfield.
International Brent crude oil futures (LCOc1) were at $60 per barrel at 0746 GMT, up 3 cents from their last close.
U.S. West Texas Intermediate (WTI) crude futures (CLc1) were at $50.98 per barrel, down 2 cents.
The rise in prices came after crude dropped by 3 percent the session before amid ongoing weakness in global stock markets and concerns that slowing oil demand-growth could erode supply cuts announced last week by the Organization of the Petroleum Exporting Countries (OPEC) and some non-OPEC producers including Russia.
Crude futures have lost around a third of their value since early October amid the financial market slump and an emerging oil supply overhang.
There are also some doubts that all producers will follow through with their announced cuts.
Russia plans to cut its oil output by 50,000 to 60,000 bpd in January, its energy minister said on Tuesday, much less than its target under a global production deal reached last week.
In a show of no confidence, money managers cut their bullish wagers on crude to the lowest in more than two years in the week ending Dec. 4, the U.S. Commodity Futures Trading Commission (CFTC) said on Monday.
The financial speculator group cut its combined futures and options position in New York and London by 25,619 contracts to 144,775 during the period. That is the lowest level since Sept. 20, 2016.
In physical markets, Kuwait and Iran this week both reduced their January crude oil supply prices to Asia.
“There remains a lot of uncertainty if the production cut is thick enough to make a significant dent in global supply,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.
“The general risk-off tone in global markets and the stronger dollar … are contributing to the selling pressure.”
The OPEC-led group of oil producers last Friday announced a supply cut of 1.2 million barrels per day (bpd) in crude oil supply from January, measured against October 2018 output levels.