Oil Jumps On Libyan Disruption, OPEC Deal Extension Hopes
NEW YORK, March 28 (Reuters) - Oil prices rose as much as 2 percent on Tuesday after a severe disruption to Libyan oil supplies and as officials suggested OPEC and other producing countries could extend an output-cuts deal to the end of the year.
Armed factions have blocked production at the western Libyan oilfields of Sharara and Wafa, reducing output by 252,000 barrels per day (bpd), about a third <PRODN-LY>, said a source at the National Oil Corp (NOC).
NOC has declared force majeure on crude loadings from those oilfields.
Brent crude rose 58 cents, or 1.14 percent to settle at $51.33 per barrel. West Texas Intermediate (WTI) crude ended the session 64 cents, or 1.34 percent higher at$48.37 a barrel. Both benchmarks were up about 2 percent at their session highs.
"The closure of two Libyan oil fields ... is supporting the market today with the timing of a potential restart uncertain after militias in western Libya shut key pipelines," Tim Evans, an energy futures specialist at Citi Futures said in a note.
"Past outages have ranged from a few days all the way up to two years, although the need for oil revenues will be a strong incentive to negotiate a pipeline restart sooner rather than later."
Iranian Oil Minister Bijan Zanganeh said the deal between OPEC and non-OPEC producers to cut output and reduce the global crude glut is likely to be extended beyond June. Russia, a non-OPEC member, is seen as a wild card. However, Russia and Iran signed a joint statement saying they will keep cooperating to reduce output.
Non-OPEC member Azerbaijan also said it was ready to join an extension of the deal.
Major oil traders gathered in Switzerland this week said they expected the output cuts to be extended, providing Russia complies.
Still, resurgent U.S. oil production and record domestic crude inventories have kept pressuring oil prices. Analysts polled by Reuters predicted that data will show U.S. crude oil stocks rose 1.4 million barrels in the latest week.
Data from the American Petroleum Institute data showed U.S. crude stocks rose by 1.9 million barrels to 535.5 million, compared with analysts' expectations for an increase of 1.4 million barrels.
The U.S. Energy Information Administration reports at 10:30 a.m. on Wednesday.
Ole Hansen, Saxo Bank head of commodity strategy, said, "An increase of more than 322,000 barrels will see Cushing hit a record."
API data showed crude stocks at the Cushing, Oklahoma, storage and delivery point for WTI fell by 576,000 barrels last week.
12
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- North America Enters Rig Loss Streak
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension