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Oil futures were under pressure Wednesday, with fears of an oversupply of crude outweighing a disruption to Libyan production.
West Texas Intermediate crude for March delivery CLH20, -0.72% fell 37 cents, or 0.6%, to $58.01 a barrel, while March Brent crude BRNH20, -0.57% lost 36 cents, or 0.6%, to trade at $64.23 a barrel.
“The fact that potentially around 1 million [barrels a day] of supply is offline whilst outright oil prices move lower signals a broader concern over continued oversupply potential,” wrote analysts at JBC Energy, a Vienna-based consulting firm, in a note.
Oil had rallied early Tuesday after Libya’s largest oil field shut down production after a pipeline was cut off, but ended the day lower.
Supply worries were underlined by remarks Tuesday by International Energy Agency Executive Director Fatih Birol on the sidelines of the World Economic Forum annual meeting in Davos, Switzerland. Birol said he sees “an abundance of energy supply in terms of oil and gas. It’s the reason that recent incidents we have seen — with the Iranian general killed, Libya unrest — didn’t boost international oil prices,” Reuters reported.
In its annual World Energy Outlook report Wednesday, the IEA said increasing U.S. shale output will continue to blunt the influence of other energy producers, including members of the Organization of the Petroleum Exporting Countries.
In other energy trading, February gasoline RBG20, -0.37% fell 0.3% to $1.6308 a gallon, while February heating oil HOG20, -0.84% dropped 0.9% to $1.8134 a gallon.
February natural-gas futures NGG20, +0.32% were up 0.5% to $1.905 per million British thermal units.
