Oil prices fall as market surplus estimate eases Libya worries

Oil prices decline on Wednesday as the International Energy Agency (IEA) predict surplus in the first half, easing concerns on the decreased Libya crude output.

Brent crude declined 0.4%, or 24 cents, at $64.35 a barrel at 0309 GMT. US oil CLcl dropped 0.5%, or 29 cents, at $58.09 a barrel.

Fatih Birol, head of the IEA, expects the market to have a million barrels per day surplus in the first six months.

“I see an abundance of energy supply in terms of oil and gas,” Birol said.

“It’s the reason that recent incidents we have seen – with the Iranian general killed, Libya unrest – didn’t boost international oil prices,” Birol added, referring to the killing of an Iranian commander and retaliation by Iran. The tension has caused prices to briefly surge earlier this month.

Libya’s National Oil Corp announced force majeure on oil loading from two large oil fields after the latest update in the military conflict.

If Libyan oil facilities do not return to operation, oil output will reduce from 1.2 million barrels per day to 72,000 bpd.

US crude production in large shale deposits is estimated to peak at record highs in February, despite the pace of increase the lowest in a year, EIA said.