Oil prices slid on Wednesday, with the commodity down 5% as traders shrugged off a huge draw in U.S. crude oil inventories and focused on the resumption of oil exports from Libya.
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Meanwhile, as reported by Reuters, the Organization of the Petroelum Exporting Countries (OPEC) expects world demand for its crude will decline next year as its rival producers output more oil. OPEC lowered its 2019 daily oil requirement forecast by 760,000 barrels per day to 32.18 million barrels per day of crude oil.
According to the U.S. Energy Information Administration (EIA), in the week through July 6 U.S. crude oil inventories decreased by 12.6 million barrels. This was a much larger draw than the 4.49 million barrel decrease analysts polled by Thomson Reuters expected. This was the largest weekly draw on U.S. crude oil inventories since September 2016.
U.S. crude oil inventories are now sitting at their lowest level since February 2015.
West Texas Intermediate crude dropped $3.73 to $70.38 a barrel.
Libya’s state-run National Oil Corp. lifted force majeure on eastern oil ports on Wednesday and could soon resume full output.
According to Al Jazeera, Gen. Khalifa Haftar agreed to hand over control of the ports.
Oil has rallied to multi-month highs amid production slumps in Libya and Venezuela, while U.S. sanctions on Iran have also supported the market.
Meanwhile, with trade tensions continuing to ratchet higher there are concerns that China could impose taxes on commodities imported from the U.S.