“This is the second salvo in the OPEC price war, a new offensive by the Saudis," Phil Flynn, analyst at the Price Futures Group in Chicago, told Reuters yesterday, commenting on the price cut.
On Friday morning, Brent Crude oil traded at $69.20 a barrel, according to data from Bloomberg, down 44 cents from Thursday’s close, representing a drop of 0.63%. WTI oil traded at $66.22 a barrel, down 59 cents or 0.88%.
The market also reacted to news that Libya is readying its El Sharara oilfield to resume production after closure last month due to a pipeline blockage and armed clashes in the region. The oilfield is one of OPEC’s largest and before its closure produced around 300,000 barrels a day.
News from Iraq this week of increased production also put pressure on prices. On Tuesday the WSJ reported the announcement on Iraqi television of a deal between the Iraqi government and its semi-autonomous Kurdistan region to export oil through Iraq’s national oil company from January. Under the terms of the agreement, 250,000 barrels of oil a day will be exported from Kurdistan and 300,000 a day from Kirkuk.