NEW YORK (Reuters) - Oil prices slumped about $3 on Monday, with Brent reaching a three-month low, as Libyan ports reopened and traders eyed potential supply increases by Russia and other producers.
Brent crude LCOc1 futures fell $3.06 to $72.27 a barrel, a 4.1 percent loss by 1:04 p.m. EDT (1704 GMT), while U.S. West Texas Intermediate (WTI) crude CLc1 futures fell $2.87 to $68.14 a barrel, a 4 percent loss.
Brent’s dive put it at its lowest since mid-April.
Falling prices offset gains late last week caused by supply outages in Libya, a labor dispute in Norway and unrest in Iraq.
Russia and other oil producers could raise output by 1 million barrels per day (bpd) or more if shortages hit the market, Russian Energy Minister Alexander Novak told reporters on Friday.
Also weighing on futures were reports the U.S. could tap its Strategic Petroleum Reserve, which would add supply to the market.
“High gasoline prices in the U.S. 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,” said Abhishek Kumar, senior energy analyst at Interfax Energy in London.
Production in Libya remained under threat. While its ports are reopening, output at Libya’s giant Sharara oilfield was expected to fall by at least 160,000 bpd after two workers were abducted by an unknown group, the National Oil Corporation said on Saturday.
On July 11, the NOC said four export terminals were being reopened after eastern factions handed over the ports, while a lengthy shutdown at El Feel oilfield in the southwest also ended. Two days later, output at the nearby 300,000 bpd Sharara was slashed.
In Norway, a strike by offshore oil and gas workers accelerated on Monday when hundreds more walked out in a dispute over pay and pensions after employers failed to respond to union demands for a new offer.
Two protesters in Iraq died on Sunday in clashes with security forces in the town of Samawa amid anger in southern cities over public services and corruption. Demonstrations have yet to affect crude production.
U.S. Treasury Secretary Steven Mnuchin said Monday the United States’ aim was to squeeze Iranian oil exports “to zero.”
Mnuchin said Washington wanted to avoid disrupting markets and would in some cases consider waivers, but it had been made clear to allies it expects them to enforce sanctions against Iran.
Mnuchin is expected to head to India to discuss sanctions; the country is a prominent importer of Iranian crude, but officials there have said it will reduce those purchases.
Reporting by Stephanie Kelly in New York, Jane Chung in Seoul and Christopher Johnson in London; Editing by Marguerita Choy, David Goodman and Chris Reese