Oil prices ease as supply risk concerns fade


21/1/2020 09:33:00
Print
     .

Oil prices eased on Tuesday as investors appeared to shrug off earlier supply concerns following a force majeure declared by Libya on two major oilfields amid a military blockade.

 

Brent crude LCOc1 was trading down 30 cents, or 0.5%, at $64.90 per barrel by 0318 GMT, after rising to their highest in more than a week on Monday. U.S. West Texas Intermediate crude futures CLc1 were down 14 cents, or 0.2%, at $58.40 a barrel.

 

“Every time we get a big geopolitical event, the market spikes up but everybody looks at that as a chance of a selling opportunity,” said Tony Nunan, oil risk manager at Mitsubishi Corp in Tokyo.

 

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

 

A document sent to oil traders and seen by Reuters on Monday said the NOC had declared force majeure - a waiver on contractual obligations - on crude loadings from El 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 had initially supported oil prices, but officials later said production in southern oilfields has not been affected by the unrest.

 

Any supply disruptions could be offset by increased output from the Organization of the Petroleum Exporting Countries (OPEC), which could limit the impact on global oil markets, the head of Japan’s petroleum industry body said.

 

“We are caught in this ($65 per barrel) trading range,” Nunan said. “Anything below and OPEC is going to have a tough time balancing their budgets ... and anything above, shale (output) will rebound.”

 

Another factor reassuring the market is OPEC spare capacity, which stands in excess of 3 million bpd, of which the bulk sits in Saudi Arabia, analysts from ING Economics said in a note.

 

Adding to supply, Guyana exported its first-ever shipment of crude on Monday, marking the tiny South American nation’s debut as an oil exporter.

 

Meanwhile, Bank of America Global Research raised its 2020 oil price forecasts on Monday, citing risks to supply from the Middle East, an improving demand outlook and higher OPEC+ compliance to deepen output cuts.

 

 

PUKmedia \ Reuters


 

Commemoration of 3 Kurdish activists shot in Paris


Thursday, Kurds saluted the seventh anniversary of the assassination of 3 Kurdish women activists in France.

 

The crime took place on January 9, 2013, targeting 3 female Kurdi...


»  3 Kurdish girls die in a fire in Norway
»  Kurdish teenager plays for several European football clubs
 

Susan Rice: U.S. has ‘sold out the Kurds’ with Syria move


Susan Rice, former U.S. ambassador to the United Nations and national security adviser in the Obama administration, joined Judy Woodruff on PBS NewsHour and discussed the Trump administration&rsquo...


»  INTERVIEW: Kurdish leader Ilham Ahmed on security in North and East Syria
»  A political analyst: The subject of the disappeared will be raised for electoral campaigns
 

Coronavirus is controllable, Chinese Foreign Minister says


China has announced a drop in new cases from the coronavirus outbreak for a third consecutive day.

 

On Sunday, authorities reported 2,009 new cases and 142 more deaths nationw...


»  Munich Security Conference: NATO secretary general defends trans-Atlantic ties
»  Remembering President Mam Jalal's historical pleading

Caricature