Investing.com - Crude oil futures retreated in Asian trade Tuesday, as the outlook for a near end to civil strife in Libya sparked expectations of a resumption of Libyan production and a rise in global stockpiles.
On the New York Mercantile Exchange light, sweet crude futures for October delivery traded at USD84.06 a barrel during early Asian trade, falling 0.4%, after hitting a daily high of USD84.58.
Rebel forces in Libya over the weekend, converged on Tripoli in what was expected to be the beginning of the end for the country’s leader, Moammar Gadhafi, and his four-decade long hold on power.
Before the beginning of the conflict six months ago, Libya produced approximately 1.6 million barrels of oil a day, of which about 1.3 million barrels was targeted for export. Production halted to a near stand-still as Gadhafi loyalists battled with rebels for control of key oil production facilities.
The market has had a difficult time replacing the supply of Libya’s highly-coveted light, sweet oil blend as other Organization of Petroleum Exporting Country’s output is of a harder, more expensive variety to refine.
Analyst expected that it could take at least a month of relative political stability and a Libyan commitment to oil production before exports could resume.
Meanwhile, the U.S. dollar rose against its counterparts, with the dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, adding 0.03% to 74.25.
Dollar-denominated oil futures tend to fall when the dollar gains, as it makes oil more expensive for buyers in other currencies.
On the ICE Futures Exchange Brent oil futures for October delivery rose 0.11% to trade at USD108.41.
Dealers were expected to monitor developments in Libya, as well as pay close attention to a meeting later this week of U.S. Federal Reserve Bank officials.