Oil prices rise on Libyan export interruption, but markets remain weak

Author: 
Reuters
ID: 
1544502747079690200
Tue, 2018-12-11 03:49

SINGAPORE: Oil prices edged up on Tuesday after Libya’s
National Oil Company declared force majeure on exports from the El
Sharara oilfield, which was seized at the weekend by a local
militia group.
Despite that, overall sentiment on oil prices remained weak amid
worries over global stock markets and doubts that planned supply
cuts led by producer club OPEC will be enough to rein in
oversupply.
International Brent crude oil futures were at $60.19 per barrel at
0336 GMT, up 19 cents, or 0.3 percent, from their last close.
US West Texas Intermediate (WTI) crude futures were at $51.16 per
barrel, up 16 cents, or 0.3 percent.
Libya’s National Oil Company (NOC) late on Monday declared force
majeure on exports from the El Sharara oilfield, the country’s
biggest, which was seized at the weekend by a militia group.
NOC said the shutdown would result in a production loss of 315,000
barrels per day (bpd), and an additional loss of 73,000 bpd at the
El Feel oilfield.
The rise came after crude prices dropped by 3 percent the session
before amid ongoing weakness in global stock markets and concerns
that slowing oil demand-growth could erode supply cuts announced
last week by the Organization of the Petroleum Exporting Countries
(OPEC) and some non-OPEC producers including Russia.
Crude futures have lost around a third of their value since early
October amid the financial market slump and an emerging oil supply
overhang.
In a show of no confidence, money managers cut their bullish wagers
on crude to the lowest in more than two years in the week ending
Dec. 4, the US Commodity Futures Trading Commission (CFTC) said on
Monday.
The financial speculator group cut its combined futures and options
position in New York and London by 25,619 contracts to 144,775
during the period. That is the lowest level since Sept. 20,
2016.
In physical markets, Kuwait and Iran this week both reduced their
January crude oil supply prices to Asia
“There remains a lot of uncertainty if the production cut is
thick enough to make a significant dent in global supply,” said
Stephen Innes, head of trading for Asia-Pacific at futures
brokerage Oanda in Singapore.
“The general risk-off tone in global markets and the stronger
dollar … are contributing to the selling pressure.”
The OPEC-led group of oil producers last Friday announced a supply
cut of 1.2 million barrels per day (bpd) in crude oil supply from
January, measured against October 2018 output levels.

Main category: 

Libya’s NOC declares force majeure on El Sharara oil exportsLibya
warns of ‘catastrophic’ fallout if protest shuts oilfield
Source: FS – All-News-Economy
Oil prices rise on Libyan export interruption, but markets remain weak