Oil Price Rise On Libya’s Force Majeure, Iraq Protest

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Oil prices rose yesterday after Libya declared force majeure on two major oilfields following a military blockade and protests escalated in Iraq raising supply concerns.

Brent crude was trading up 11 cents, or 0.2 percent, at $65.31 per barrel while the U.S. West Texas Intermediate crude futures were up 20 cents, or 0.3 percent, at $58.74 a barrel.

“Rising disruptions in Libya are likely to keep oil prices well supported in coming days,” analysts from Australia and New Zealand Banking Group said in a note on Tuesday.

Two major oilfields in southwest Libya began shutting down on Sunday after forces loyal to Khalifa Haftar closed a pipeline, potentially reducing national output to a fraction of its normal level, the country’s National Oil Corp (NOC) said.

The NOC had declared force majeure – a waiver on contractual obligations – on crude loadings from the Sharara and El Feel oilfields in Libya’s southwest.

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), an NOC spokesman said. Libya has been producing around 1.2 million bpd recently.

Anti-government unrest in Iraq, another major oil producer, also supported oil prices, although officials have said production in southern oilfields has not been affected by the unrest.

Meanwhile, a recent statistics issued by the Organisation of the Petroleum Exporting Countries, OPEC, highlighted a decrease in its production by 6.3 percent or some 2 million barrels per day in 2019, compared to 2018.

Anti-government unrest in Iraq, another major oil producer, also supported oil prices, although officials have said production in southern oilfields has not been affected by the unrest.

Meanwhile, a recent statistics issued by the Organisation of the Petroleum Exporting Countries, OPEC, highlighted a decrease in its production by 6.3 percent or some 2 million barrels per day in 2019, compared to 2018.

Our correspondent


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