Commodities: Crude veers heavily lower as Libya output surges

Crude-oil futures veered heavily lower on Wednesday as markets already underwhelmed by Opec's recent output-curb extension now quit the asset on fears of surging Libyan production.

The precious black liquid has been snared in a chronic supply glut, which saw Opec introduce production pledges last year, which it last week extended out to March 2018.

At 15:22 BST, Nymex-priced West Texas Intermediate crude was down 3.16% to $48.09 a barrel. Intercontinental Exchange-traded Brent fell 3.49% to $50.03 a barrel.

"Another slide in crude oil prices, to three week lows, has once again shifted the focus back to the ability of Opec to meaningfully influence the mechanics surrounding reducing inventory levels," said Michael Hewson, chief market analyst at CMC Markets UK.

"News that Libyan production is continuing to grow at levels last seen over three years ago, threatens the prospect that, with rising US output, the OPEC cuts will become almost meaningless."

Libya's output was seen returning to a three-year production peak of about 800,000 barrels a day this week, as the flow from its largest oil field recovered from a technical problem.

In the meantime, production in the US had risen to more than 9.3m barrels a day, which was near to leading producers Saudi Arabia and Russia.

Carsten Fritsch, a commodity analyst at Commerzbank, told CNBC: "Unless some bullish news stops this, prices will fall further in particular now with Brent trading below the post-Opec low."

Today's falls in oil extended those seen on Tuesday, when bears sold on doubts that cartel Opec's extended production cuts would alleviate the global glut.

Meanwhile, on Comex, gold was up 0.36% to $1270.20 an ounce. Silver fell 0.53% to $17.34 an ounce, and copper fell 0.12% to 256.1 cents a pound.

On London Metals Exchange, three-month industrial metals were mostly lower. Aluminum fell 1.28%, zinc lost 0.57% and copper dropped 0.03%. Tin, however, rose 0.05%.