Oil prices fell more than 1% on Tuesday on expectations that a well-supplied market would be able to absorb disruptions that have cut Libya’s crude production to a trickle.

Brent crude fell 98 cents, or 1.5%, to $64.22 per barrel, having earlier touched $66 a barrel, the highest since Jan. 9.

The West Texas Intermediate contract fell 75 cents, or 1.3%, after previously rising to $59.73, the highest since Jan. 10.

Almost all of Libya’s crude export capacity is now under force majeure - a waiver on contractual obligations - after pipeline blockades in the east and west of the country hindered oil production.

If Libyan exports are halted for any sustained period, storage tanks will fill within days and production will slow to 72,000 barrels per day (bpd), said a spokesman for state oil company NOC. Libya has been producing about 1.2 million bpd recently.

Source : Reuters