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Oil Prices Continue to Drop | ASHARQ AL-AWSAT English Archive 2005 -2017
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A worker looks at a pump jack at an oil field Buzovyazovskoye owned by Bashneft company north from Ufa, Bashkortostan, Russia, July 11, 2015.REUTERS/Sergei Karpukhin/File Photo

Cairo–Oil prices continued to drop during Wednesday’s session despite the decrease in the U.S. crude oil’s reserves. Yet, the Libyan statements that oil production could be increased soon had negative effects on the market.

The oil market received two blows this week after the release of the International Energy Agency’s (IEA) monthly market report stating that production is at a “faster pace than initially predicted,” and the report of the Organization of the Petroleum Exporting Countries (OPEC) which declared production increase during the next year.

Brent crude in London closed at $46 a barrel, while U.S. Crude closed at $43.

U.S. Energy Information Administration reported that the U.S. inventories of distillates, which include diesel and heating oil, rose by 4.6 million barrels in the week to September 9.

Analysts had expected an increase of 1.5 million barrels. It was the biggest weekly build since January, putting distillates at six-year seasonal highs. Gasoline stockpiles also rose more than expected, but crude inventories fell by 559,000 barrels.

Libyan oil officials announced that force majeure, a legal clause that bans shipments from oil ports, was being lifted from these four ports and exports would restart imminently from Zuwaytina and Brega.

Chairman of National Oil Company Mustafa Sanallah said that the country could raise production to 600,000 barrels a day within weeks from around 290,000 barrels a day currently if the necessary funds were made available by the central government.

OPEC officials are expected to hold an unofficial meeting in Algeria this month on the sidelines of the International Energy Conference, where Russia is anticipated to participate.

Iraqi oil officials announced that oil pumping from Kirkuk to the Turkish harbor Jihan stopped due to technical difficulties. An official at the North Oil Company told the German News Agency that the pumping was halted due to technical problems adding that the maintenance teams started the four-day process to fix the issues.

Earlier, the Iraqi Oil ministry began the pumping process from Kirkuk to Jihan at a rate of 100,000 barrels per day.

What also affected the market negatively was the announcement of the Iranian Ministry of Oil to export 2.4 million barrels per day by March. Currently, Iran produces 3.8 million barrels per day.

Iranian media reported on Wednesday that a fire broke out at Iran’s Mobin Petrochemical refinery complex in southern port of Assaluyeh, leaving four people injured, the latest in a string of blazes in the region.

IRNA quoted crisis management coordinator Qassem Qaedi as saying: “The fire … is now under control” and that it didn’t cause any threat to the operations in the South Pars gas fields in Assaluyeh.