NEW YORK, Oct. 17 (UPI) — Signs of growing confidence in the U.S. economy and building supplies elsewhere pulled oil prices lower early Monday despite conflict in OPEC states.
In a weekend statement, the U.S. government said it was concerned by mounting violence in Libya, where rival factions had taken control over some government buildings in Tripoli. Libya is struggling to return to economic life after years of civil war.
Total crude oil production last month from Libya, reported to the Organization of Petroleum Exporting Countries by secondary sources, was 34 percent higher than August, but at 363,000 barrels per day, was still about 20 percent less than the average for last year and far below the pre-war level above 1 million bpd.
Libya is among the countries that may be excluded from a production proposal offered last month in Algeria.
In Iraq, which is debating with OPEC about how production is reported, U.S. and international partners are supporting Iraqi forces in their effort to retake Mosul, Iraq’s second-largest city, from the Islamic State terrorist group.
“We are confident our Iraqi partners will prevail against our common enemy and free Mosul and the rest of Iraq from [the group’s] hatred and brutality,” U.S. Defense Secretary Ash Carter said.
Oil deliveries from northern Iraq to the Turkish port at Ceyhan have been interrupted by terrorists operating from Mosul in the past. Nevertheless, a build, or expected build, in production from Iran and Nigeria helped pull oil prices into negative territory early Monday.
The price for Brent crude oil lost 0.2 percent to start trading in New York at $51.83 per barrel. West Texas Intermediate, the U.S. benchmark price for oil, was down 0.4 percent to open at $50.13 per barrel.
Iran, which in the past has balked at production targets to control the price of oil, said it was close to producing about 4 million bpd, a level that’s comparable to an era before nuclear-related sanctions were tightened in 2012. The government of Nigeria, which may be exempt from any production agreement, said, for its part, that oil production could be on the rebound after facing pressure from militant activity in the Niger Delta.
The U.S. Federal Reserve, meanwhile, reported industrial production increased 0.1 percent last month after contracting in August. Manufacturing output also saw gains in September. That data could support a case for an increase in the key lending rate later this year, which would influence the value of the U.S. dollar and potentially influence crude oil prices.