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Oil falls after Libya ports reopen, Trump tariff threat

Reuters  |  LONDON 

By Christopher Johnson

LONDON (Reuters) - Global benchmark Brent fell more than $2 a barrel on Wednesday after U.S. threatened to levy new tariffs on China and Libya announced the reopening of key export terminals.

The spectre of tariffs on a further $200 billion of Chinese goods sent commodities lower along with stock markets, as tension between the world's biggest economies intensified.

Brent crude fell $2.10, or 2.7 percent, to a low of $76.76 before recovering slightly to $77.20, down $1.66, by 1208 GMT. U.S. light crude, supported by a tight North American market, was down 65 cents at $73.46 a barrel.

"Trade concerns have bitten today," said Michael McCarthy, at "If these tariffs are introduced there will be an impact on global growth and demand."

The price fall was aided by Tripoli-based Corp (NOC) had lifted a force majeure on four Libyan oil ports, saying production and exports from the terminals would "return to normal levels in the next few hours".

Libyan fell to 527,000 barrels per day (bpd) from a high of 1.28 million bpd in February following the port closures, the NOC said on Monday.

"The lifting of force majeure at all the Libyan ports will certainly come as relief from a supply perspective, but it remains to be seen how quickly exports can return to normal," Harry Tchilinguirian, at BNP Paribas, told Global Oil Forum.

Adding to the bearish mood were signs of a possible relaxation of U.S. sanctions on Iranian crude exports.

U.S. said on Tuesday that would consider requests from some countries to be exempt from sanctions due to go into effect in November to prevent from exporting oil.

had previously said countries must halt all imports of Iranian oil from Nov. 4 or face U.S. financial measures, with no exemptions.

The pulled out of a multinational deal in May to lift sanctions against in return for curbs to Tehran's nuclear programme.

The prospect of sanctions on from Iran, the world's fifth-biggest oil producer, has helped push up in recent weeks with both crude contracts trading near 3-1/2-year highs.

Supply to the U.S. market has also been squeezed by the loss of some Canadian

U.S. crude inventories fell last week by 6.8 million barrels, according to the American Petroleum Institute, an industry group.

Analysts polled by forecast on average that crude stocks fell by 4.5 million barrels, ahead of government data at 10:30 a.m. EDT (1430 GMT) on Wednesday.

(Additional reporting by in Tokyo; Editing by and Louise Heavens)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, July 11 2018. 17:53 IST