Oil gains as Libyan pipeline crashes An unexpected disruption in Libyan crude output is helping oil investors shrug off record US stockpiles that have undermined voluntary supply curbs by other Organisation of Petroleum Exporting Countries (Opec) nations.
Libya's output was said to fall to 560 000 barrels a day after a pipeline carrying crude from the Sharara field - its biggest - stopped operating. While clashes among rival armed groups in the nation have previously led to market disruptions, news of the latest decline is driving a 0.4% gain in New York oil futures after boosting them 1.3% on Tuesday.
Prices are headed for two straight days of gains for the first time in more than a month.
The production drop in Libya, which was pumping 700 000 barrels a day before the pipeline halt, is at least temporarily easing concern that rising US supply is countering the effect of curbs by the Organisation of Petroleum Exporting Countries and its allies.
US industry data on Tuesday was said to show that crude inventories had climbed, while a government report was forecast to show that stockpiles had expanded. Six Opec nations have joined with non-member Oman to voice support for prolonging their cuts past June.
“The market has become quite accustomed to volatility when it comes to Libya and their production coming and going,” said David Lennox, a resource analyst at Fat Prophets in Sydney.
“There are a number of headwinds to oil prices, including rising US output and stockpiles.”
West Texas Intermediate for May delivery was at US$48.54 a barrel on the New York Mercantile Exchange, up 17 cents, at 13:23 in Hong Kong. Total volume traded was about 56% below the 100-day average. The contract gained 64 cents to US$48.37 on Tuesday.
Brent for May settlement was 14 cents higher at US$51.47 a barrel on the London-based ICE Futures Europe exchange. Prices climbed 58 cents, to US$51.33 on Tuesday. The global benchmark was at a premium of US$2.93 to WTI.
Libya's state-run National Oil Corporation was said to declare force majeure on loadings of Sharara crude from the Zawiya oil terminal and on loadings of Wafa field condensate from the Mellitah terminal.
Force majeure is a legal status protecting a party from liability if it can't fulfil a contract for reasons beyond its control.
BLOOMBERG
Libya's output was said to fall to 560 000 barrels a day after a pipeline carrying crude from the Sharara field - its biggest - stopped operating. While clashes among rival armed groups in the nation have previously led to market disruptions, news of the latest decline is driving a 0.4% gain in New York oil futures after boosting them 1.3% on Tuesday.
Prices are headed for two straight days of gains for the first time in more than a month.
The production drop in Libya, which was pumping 700 000 barrels a day before the pipeline halt, is at least temporarily easing concern that rising US supply is countering the effect of curbs by the Organisation of Petroleum Exporting Countries and its allies.
US industry data on Tuesday was said to show that crude inventories had climbed, while a government report was forecast to show that stockpiles had expanded. Six Opec nations have joined with non-member Oman to voice support for prolonging their cuts past June.
“The market has become quite accustomed to volatility when it comes to Libya and their production coming and going,” said David Lennox, a resource analyst at Fat Prophets in Sydney.
“There are a number of headwinds to oil prices, including rising US output and stockpiles.”
West Texas Intermediate for May delivery was at US$48.54 a barrel on the New York Mercantile Exchange, up 17 cents, at 13:23 in Hong Kong. Total volume traded was about 56% below the 100-day average. The contract gained 64 cents to US$48.37 on Tuesday.
Brent for May settlement was 14 cents higher at US$51.47 a barrel on the London-based ICE Futures Europe exchange. Prices climbed 58 cents, to US$51.33 on Tuesday. The global benchmark was at a premium of US$2.93 to WTI.
Libya's state-run National Oil Corporation was said to declare force majeure on loadings of Sharara crude from the Zawiya oil terminal and on loadings of Wafa field condensate from the Mellitah terminal.
Force majeure is a legal status protecting a party from liability if it can't fulfil a contract for reasons beyond its control.
BLOOMBERG