Futures fell 2.5 percent in New York. China’s oil refining dropped the most in three years in July, while crude output retreated from the highest this year. Libya’s biggest oil field, Sharara, cut output by more than 30 percent because of security threats, a person familiar with the matter said. Meanwhile, the dollar strengthened, eroding the lure of commodities as a store of value. "We’re seeing some strength in the dollar, and the preponderance of news seems to be favoring the bears right now," Phil Flynn, senior market analyst at Price Futures Group Inc. in Chicago, said by telephone. "If you look at the China data this morning, when it came to the China refinery runs being down in July, that’s adding to the perception of slowing demand, and it’s offsetting the concerns about Libyan oil production." Click Read More below for additional detail.
Oil prices jumped more than 3 percent on Tuesday, bouncing back from multi-month lows on expectations that OPEC will agree later this month to cut production to reduce a supply glut.
North Sea Brent crude oil LCOc1 was up $1.50 a barrel at $45.93 by 1200 GMT after hitting a three-month low of $43.57 on Monday. U.S. light crude CLc1 was up $1.50 a barrel at $44.82. It reached a three-month low of $42.20 on Monday.
Oil producers in the Organization of the Petroleum Exporting Countries are due to meet later this month to agree to limit output. An outline deal was reached in September but negotiations on the detail are proving difficult, officials say.
Saudi Arabia’s energy minister has said it is imperative OPEC reach a consensus on a deal to curb production, Algeria’s state news agency APS said on Sunday.
“Reports of a diplomatic push by OPEC to strike a deal are supporting the markets,” said Tamas Varga, oil analyst at London brokerage PVM Oil Associates. “The rally could last a little while but the underlying fundamental picture is still bearish.”
more at: http://uk.reuters.com/article/us-global-oil-idUKKBN13A068