Crude fell on Wednesday, with Brent tumbling by more than $1 but U.S. crude seeing modest declines, as traders ignored an unexpected drop in U.S. oil inventories amid expectations that Libya's bottlenecked oil hubs would soon reopen.
The slide began on Tuesday with news that a rebel group in eastern Libya had agreed with the government to end its seizure of oil ports, raising hopes for an end to an eight-month stalemate that has dried up state income. On Wednesday, a rebel official told Reuters they would reopen the smaller Zueitina oil port first, once they have clinched a final deal with the government. He said talks with the government were ongoing.
Brent crude was down about $1, trading over $104 a barrel and its lowest since Nov. 8. U.S. crude pared early losses to end 12 cents lower at $99.62 a barrel. The May contract briefly fell to parity with the June contract, threatening to move to a discount, or contango, which signals ample supplies and weak demand.