Oil drops below $111 on high U.S. output

Calgary: Brent oil fell below $111 per barrel on Thursday, weighed down by a bigger-than-expected rise in U.S. crude stockpiles, although Libyan supply disruption kept prices supported.

Brent crude fell 46 cents to $110.85 a barrel by 1810 GMT. It is still up nearly 2 percent in November, and around $8 above its low for the month.

U.S. crude oil stocks rose by almost 3 million barrels to 391 million barrels, their highest level for November since records began in 1982, the Energy Information Administration said in weekly data on Wednesday.

The EIA also said U.S. crude oil output last week exceeded 8 million bpd for the first time since January 1989. Earlier this month, its data showed that crude production exceeded imports for the first time in nearly two decades.

Libyan Prime Minister Ali Zeidan said on Wednesday his government would be unable to pay public salaries and may have to seek loans if armed militias blockading oilfields and ports continued to choke off crude shipments.

Brent oil’s premium to U.S. crude reached $19.32 per barrel, just off its highest level since March.

Trade is light due to the Thanksgiving holiday in the United States.

Refiners in Europe and the United States are coming back from maintenance and increasing output which has seen demand for crude recovering.

International Energy Agency (IEA) head Maria van der Hoeven said oil markets were adequately supplied even with the prospect of dwindling crude output from Libya.

Source: Reuters