2014.07.0701:48:26UTC+00Entry of Libya pushes further Brent down

The European benchmark has seen itself tumble the past week with crude supplies from the Middle East and Africa looking stable.

Contracts for Brent in August went to its lowest in three weeks on July 4th when it dropped 36 cents to end up with a price per barrel of $110.64 and mark its longest negative streak since January of five consecutive losing days. On the New York Mercantile Exchange today, its US counterpart, the WTI, was down six cents to $104 per barrel and was trading $6.80 below Brent.

Largely contributing to the depreciation of oil is the unchanged situation in Iraq. After pushing crude prices up behind the threat of Islamist insurgents in the north, the bulk of the country’s production facilities were shown to be safe in its southern regions. Iraq’s production levels last month were enough to live up to their title as the second largest producer in the Organization of Petroleum Exporting Countries (OPEC).

Further adding downward pressure on prices is an incoming increase in supply resulting from the reopening of two oil ports in Libya originally held by rebels since last year. The Es Sider and Ras Lanuf ports can each process daily 340,000 and 220,000 barrels respectively that could lift Libya from being the OPEC’s smallest producer. Despite having access to the largest reserves in Africa, Libya’s daily production of crude oil in June has been limited by civil unrest to only 300,000 barrels, far below the 1.13 million barrels during the same period last year. The opening of the ports signified the easing of tensions as rebels accepted the placement of a new government.

Resource analyst David Lennox from Sydney-based Fat Prophets says that “oil is likely to remain flat” on these news favorable for supply.