New York (Platts)--7Jul2014/432 pm EDT/2032 GMT

Oil futures settled lower Monday on expectations that Libya will soon resume exports of oil from two major ports.

NYMEX August crude settled 53 cents lower at $103.53/barrel. ICE August Brent settled 40 cents lower at $110.24/b. In refined products action, NYMEX August ULSD settled 1.39 cents lower at $2.9145/gal and August RBOB ended 3.08 cents lower at $2.9890/gal.

Oil futures dipped following reports that Libya's state-owned National Oil Corp. lifted force majeure declarations on the major eastern Libyan ports of Es Sider and Ras Lanuf Sunday.

But analysts, including Tim Evans of Citi Futures Perspective, said that technical issues needed to be resolved, warning that everything could be back to "square one" if the government did not hold up its end of the bargain.

As with all things Libyan, said BNP Paribas analysts Harry Tchilinguirian and Gareth Lewis-Davies, the latest news that crude exports will restart should be treated with caution, given the many previous occasions when promised restarts failed to materialize.

"It is unlikely that the two port facilities can sustain maximum throughput until maintenance on the crude oil pipelines from the oil fields to the ports, which have not been operational for 11 months, has been completed," Tchilinguirian and Lewis-Davies said.

Crude exports in the near term will come from oil stored at the ports that total 4.5 million barrels and 3 million barrels at Es Sider and Ras Lanuf, respectively, the analysts said, and would likely only last for about 13 to 15 days.

"Nonetheless, any additional Libyan barrels [that] may emerge would be regarded as negative for Brent -- a crude of similar quality, and competing in similar markets, to Libyan output," the analysts said.

Evans noted that the oil futures market also seems "comfortable that Russia won't intervene in eastern Ukraine, where the Ukrainian army has been making significant progress in regaining control from pro-Russian separatists.

Concern over Iraq also seems limited, Evans said, despite reports that the next parliamentary session may be postponed over the lack of consensus on a prime minister to lead a new government.

--Alison Ciaccio, alison.ciaccio@platts.com --Edited by Keiron Greenhalgh, keiron.greenhalgh@platts.com

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