Brent oil prices fell by over four per cent on Monday after Libya announced it had reopened its oil ports and Russia said it could increase its production if crude supplies fall short of demand.  Anadarko photo. 

Brent oil prices hit three month low

Oil prices dropped on Monday.  Brent crude fell to a three-month low as supply outage concerns eased after Libya reopened its oil ports and Russia and other producers hinted they may increase their production.

By 2:55 p.m., EDT, benchmark Brent crude futures fell $3.11 to $72.22/barrel.  US WTI was down $2.72 to $68.29/barrel.  The Canadian Crude Index slipped $2.86 to $40.33.

Brent’s price is at its lowest level since mid-April.

Russia and other crude producers say they can boost production by 1 million barrels per day (b/d), or more if the market is in short supply, according to Russia’s Energy Minister on Friday.

As well, futures were weighed down after reports surfaced that the US could tap its Strategic Petroleum Reserve, which will increase supply to the market.

“High gasoline prices in the US remain a concern for the Trump administration ahead of the congressional elections in November and steps taken by ‘OPEC Plus’ so far have done little to dampen global oil prices,” Abhishek Kumar, senior energy analyst at Interfax Energy told Reuters.

While ports have reopened in Libya, unrest in the North African nation continues.  On Saturday, two oil workers at the Sharara oilfield were abducted by an unknown group, according to the National Oil Corporation.

Last week, NOC announced four export terminals were reopened after opposing factions ceded the ports and a shutdown at El Feel oilfield also ended.  But, two days later, production at the 300,000 b/d Sharara was reduced.

On Monday, hundreds more of Norway’s oil and gas workers walked off the job in a dispute over wages and pensions after oil companies did not respond to union demands for a new offer.

Also on Monday, US Treasury Secretary Steve Mcuchin said the aim of the US is to cut Iranian oil exports “to zero”.

Mnuchin said the Trump administration is hoping its decision to impose sanctions on Iran’s crude will not disrupt markets and they may consider waivers to Iran’s customers.  Mnuchin added that allies have been told that the United States expects them to enforce sanctions against Tehran.

According to Reuters, Mnuchin is expected to travel to India to discuss sanctions.  India imports a significant amount of Iranian crude, and officials have said they will cut their purchases.