Libya oil terminal Zueitina
Workers are seen next to pipelines at the Zueitina oil terminal in Zueitina, west of Benghazi, LIbya Photo: Reuters

Oil futures saw heavy declines on Friday (16 September), with the prospect of further supply hounding the market, while gold futures also tumbled as rising yields elsewhere reduced investor appetite for the yellow metal.

At 10:56am BST on Friday, the Brent front month futures contract was down 1.48% or 69 cents to $45.90 per barrel, while the West Texas Intermediate was 1.37% or 60 cents lower at $43.31 per barrel, as the market factored in the lifting of force majeure at several major Libyan terminals.

Meanwhile, with additional barrels expected from Nigeria as well, analysts at Vienna-based JBC Energy said the situation, while proving a drag on oil prices, can change at any time given the problems in the Niger Delta.

"Exports of Nigerian Qua Iboe crude, which have been under force majeure since July, will reportedly resume by late September/early October. While this is certainly good news for Nigerian supplies, the Niger Delta Greenland Justice Mandate militant group confessed to having blown up a major crude pipeline in the Delta.

"This highlights that despite the peace deal between the government and the Niger Delta Avengers, another major rebel group, authorities may have to brace themselves for opposition from other movements in the Niger Delta, which also might continue to have a detrimental impact on the country's oil sector."

Away from the oil market, precious metals continued its slide as traders moved away from the safety of gold towards riskier high-yielding asset classes. At 11:07am BST, Comex gold for December delivery was 0.15% or $2.00 lower at $1,313.00 an ounce, while Comex silver was down 0.29% or 6 cents to $18.98 an ounce. Concurrently, spot platinum was 0.59% or $6.07 lower at $1,026.39 an ounce.

FXTM research analyst Lukman Otunuga said: "The ongoing uncertainty over US Federal Reserve's policy on interest rates encouraged investors to offload positions. Although expectations have been thoroughly discounted over September being a live meeting to raise US interest rates, the element of surprise has left investors on edge consequently punishing gold."