Oil pared its first weekly gain in a month as Libya sought to increase output and Russia ruled out military retaliation against Turkey for downing its jet near the Syrian border.
Futures fell as much as 1.7% in New York, trimming this week’s advance to 5.1%. Libya said it’s making progress to resume crude production at two fields after more than a year including Sharara, the OPEC member’s biggest.
Russian President Vladimir Putin signalled his country will cooperate with the broader alliance against Islamic State after meeting his French counterpart in Moscow on Thursday.
Oil has slumped about 35% in the past year as US crude inventories climbed to near a record and the Organization of Petroleum Exporting Countries pumped above its quota to defend market share.
Iran has said it will announce plans to expand output by 500,000 barrels a day when OPEC members gather to discuss policy December 4 in Vienna.
“If Libya resumes oil production, it can be another factor that will add to the global supply glut,” Hong Sung Ki, a commodities analyst at Samsung Futures in Seoul, said. “Geopolitical tensions between Russia and Turkey are limited in moving the actual prices of oil.”
West Texas Intermediate for January delivery dropped as much as 75 cents to $42.29 a barrel on the New York Mercantile Exchange. Prices have declined almost 9% this month.
Brent for January settlement was 16 cents lower at $45.30 a barrel on the London-based ICE Futures Europe exchange. The contract is up 1.4% this week. Total volume was about 28% below the 100-day average.
A Libyan committee has met to resolve issues that have shut export terminals and crude supply from Sharara and Elephant, according to Mustafa Sanalla, the chairman of National Oil Corp. in Tripoli.
The fields have a combined capacity of 440,000 barrels a day and could resume full production within seven days of a decision to restart operations, he said by phone Thursday. Libya, with Africa’s largest oil reserves, is exporting about 260,000 barrels a day.
While Russia began economic retaliation against Turkey in response to the shooting down of a Russian fighter jet near the Syrian border on Tuesday, it ruled out military action.
Putin and French President Francois Hollande said the two sides would exchange information about which areas of Syria are controlled by the country’s moderate anti-government groups.