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Amsterdam Oil prices fell on Wednesday, weighed down by concerns about rising production from Libya feeding into an oversupplied market and a surprise increase in US petrol inventories.

Benchmark Brent crude futures were down 27 US cents at $51.60 a barrel at 9.50am GMT. US West Texas Intermediate crude futures were trading at $47.67, down 16c.

Production from Libyas Sharara oilfield, the conflict-riven countrys largest, has been see-sawing. The field remained shut on Wednesday, two Libyan oil sources said. The field had restarted at least once on Tuesday amid conflicting reports about whether it had reopened.

"The flood of news reports makes it clear that the situation in Libya is still chaotic and that conditions in the country are still far from normal," Commerzbank analysts wrote.

Sharara recently reached output of 280,000 barrels per day, but closed this week due to a pipeline blockade. Its production is key to Libyas oil output, which surged above 1-million barrels per day in late June, about four times its level in the middle of 2016.

Libyas rising output is a headache for oil cartel Opec, which together with nonOpec producers including Russia has pledged to cut about 1.8-million barrels per day of supplies between January 2017 and March 2018 in an attempt to remove a global glut.

Additionally, industry data released by the American Petroleum Institute showed on Tuesday that US petrol stocks rose by 1.4 million barrels in the week to August 18, compared with analysts expectations of a 3.5-million-barrel drop.

Jeffrey Halley, senior market analyst at futures brokerage Oanda, said rising US petrol inventories were "not a good sign during the US summer driving season".

Official inventory data from the US Energy Information Administration was due later on Wednesday.

Reuters

Excerpt from:
Price of oil slumps on rising production in Libya - Business Day (registration)