Crude oil prices were moving into negative territory in early trading Monday on suggestions that supply-side pressures could put a limit on the market.
Crude oil prices moved higher late last week after Libya declared force majeure over contracts at its Elephant, or El-Feel, oil field following labor strikes. Libya's National Oil Corp. said Friday that some workers walked off their posts after guards issued threats to them and fired weapons in the air.
The NOC said it was in contact with community leaders in an effort to resume operations at the field as soon as possible. The news service for commodity pricing group S&P Global Platts last week reported the disruption could spread to the Sharara field, which is producing about 30 percent of Libya's current total.
The supply disruption from Libya, a member of the Organization of Petroleum Exporting Countries, overshadowed exploration and production gains in North America. Baker Hughes in its weekly rig count report found the number of rigs deployed in U.S. shale basins increased for their fifth straight week.
Swiss global financial services company UBS said in a market report emailed to UPI that global oil supplies could grow as fast as they did in 2014-15, when supply-side pressures helped push the price of oil to historic lows.
"We expect energy supply growth to outpace demand growth and set a backdrop for well-supplied fossil fuel markets this year," the report read.
The price for Brent crude oil was down 0.22 percent as of 9:22 a.m. EST to $66.89 per barrel. West Texas Intermediate, the U.S. benchmark for the price of oil, was down 0.25 percent to $63.39 per barrel.
UBS said the price for Brent could bottom out in the upper $50 per barrel range. In its fourth quarter report last week, Austrian energy company OMV said it expected the price of crude oil to average $60 per barrel this year.
Crude oil prices are still improved over last year, despite settling below the multi-year high in January of $70 per barrel. British analytics company Westwood Global Energy Group said more than 60 orders for floating production facilities are expected over the next five years, up from zero in 2016. It will be Latin America that sees the bulk of the new spending with 43 percent of the $51 billion forecast through 2022.
