Here’s how bearish the oil market is: Libya—where rising production has been one of the main reasons for the six-month price plunge—declared force majeure at two major oil ports, taking some 300,000 barrels a day off the market, yet crude prices plunged to a new low in early trading today. The price of international benchmark Brent crude has since recovered a bit, but the dive shows the market’s chronic dark mood.
Libya has been exporting more than 750,000 barrels of oil a day, volumes that, along with a surge of US shale oil supplies, have been crucial to sending down global crude oil prices since June. In fact, Libya had said it would export up to 1 million by the end of the year (paywall). But fighting between the government and an Islamic militia the last two days has closed the port of Es-Sider and may have shut down Ras Lanuf as well, reducing exports to about 450,000 barrels a day.
Despite that news, international benchmark Brent crude flirted with the $50s-per-barrel in early Asian trading, falling as low as $60.28 a barrel, 48% below its June peak, before bouncing back once traders decided to buy on the Libyan news.
But the trend remains down. On Dec. 12, the average of what OPEC countries receive for their crude—called the OPEC basket—dropped below $60 a barrel for the first time since 2009; it closed at $58.65.
If Brent—the broader reflection of global oil prices—falls below $60 a barrel, it will have crossed two psychological thresholds in a single month: it only fell under $70 a barrel on Dec. 5. Prior to now, Brent had been crossing a new $10-a-barrel price threshold once a month since September, when it fell below $100 a barrel. It is now breaking through these barriers twice as fast: