Oil Slips Towards $96 on Ample Supply

Oil Slips Towards $96 on Ample Supply
Oil Slips Towards $96 on Ample Supply

Oil fell towards $96 a barrel on Wednesday as rising supply from Africa and Iraq offset mounting tensions in the Middle East and better-than-expected data in China.

Weak European economic data and a rise in oil exports from Iraq, Libya and Nigeria have hammered the oil price, which is down nearly 14 percent this quarter.

Brent for November delivery fell 34 cents to $96.51 a barrel on Wednesday. It was down more than 6 percent for the month so far, the biggest monthly drop since April 2013.

US crude fell 13 cents to $91.43 a barrel.

Libya was producing 800,000 barrels per day (bpd), up about 14 percent from Sunday, after the El Sharara oil field restarted production.

Exports from Iraq's southern terminals have averaged 2.58 million bpd, according to shipping data for the first 23 days of September tracked by Reuters, up from the August average of 2.38 million.

Nigeria's oil exports are expected to hit a 14-month high in November, adding more light, sweet crude oil to an already well supplied market.

Meanwhile, the European Central Bank faces an uphill task to spur growth as euro zone business activity expanded at a slightly weaker pace than expected in September as firms cut prices for the 30th month in a row, a survey showed on Tuesday.

Manufacturing and services output in the bloc's top two economies, Germany and France, has also slowed.

In China, August crude inventories, excluding strategic reserves, were higher than the previous month.

China's 2015 economic growth, however, is expected to be "well above" 7 percent, according to the International Monetary Fund on Wednesday.

For now, oil prices are under pressure and even US manufacturing activity, which held near a 4-1/2-year high this month, and tensions in the Middle East have failed to turn the market around

Technical analysts said that there is little to stop oil slipping towards $90 per barrel.

Meanwhile, US investors were waiting for weekly oil inventory data from the Energy Information Administration later on Wednesday for indications about demand in the world's largest oil consumer. Crude inventories fell by 6.5 million barrels in the week to Sept. 19, data from industry group the American Petroleum Institute showed on Tuesday. Analysts in a Reuters poll were expecting inventories to have risen by 400,000 barrels.

According to Reuters, any long-term rise in prices for US oil is unlikely.