WTI oil trading near $86, rebounds on Libya production doubts

WTI oil futures open Tuesday’s trading session back near $86 a barrel as prices rebound off session lows yesterday as fresh doubts emerge over a return to normal oil production levels in Libya any time soon.

Latest WTI Oil Price

US Light crude oil futures for October 2011 delivery was trading at $85.73 a barrel, 07.40 GMT this morning in electronic trading on the NYMEX. The US contract dipped on Monday then recovered in late trading to $84.45 a barrel.

Libya Oil Production Doubts

Analysts are again questioning how fast Libya’s oil production could recover should rebels take power. Fighting since February has cut the OPEC nation’s crude output to 60,000 barrels a day from 1.5 million, and the country’s oil infrastructure has been damaged.

Goldman Sachs said it was sticking by its forecast that Libya’s oil production will average 250,000 barrels a day next year.

“It will be challenging to bring the shut-in production back online. We don’t change our production forecast until we have more clarity on the situation.” Goldman Sachs said in a report.

Other analysts are more optimistic. Libyan crude output will likely return to pre-war levels in the first half of next year, said Richard Soultanian of NUS Consulting.

“With the new regime entirely dependent on oil revenues, the momentum to get facilities operational will be overwhelming. In order for this new democracy to attract enough support, it will need to get oil flowing right away.” energy consultant Cameron Hanover said in a report.

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WTI oil trading near $86, rebounds on Libya production doubts