Following reduced crude output in Libya (an OPEC member) and other OPEC exporters, oil prices rose this week. Oil production in Libya has fallen by over 250 000 bpd this week after armed protesters blocked its Sharara oilfield, which stopped a pipeline operating. The country was pumping 700 000 bpd before the pipeline halt. Meanwhile, OPEC members are intentionally trying to trim 1.2 million bpd during 1H17 as part of a recent deal to gradually restore the market to balance.
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"Oil prices climb"
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A survey conducted by Reuters has suggested that OPEC oil output has fallen for a third straight month, and that the members have now obeyed 95% of their commitments under the deal.
Meanwhile, as highlighted by Bloomberg, while US crude stocks rose last week, they did so by less than expected. The US has seen its longest stretch of gains in over a month due to the unexpected disruption in Libyan production, which helped to increase prices up 3.7% over the past two sessions. World Oil reported: “the latest news [about of Libya’s production] drove New York oil futures up as much as 1% after boosting them 1.3% on Tuesday.”
The news source added: “The production drop in Libya […] is at least temporarily easing concern that rising U.S. supply is offsetting the effect of curbs by OPEC and its allies.”
Tamas Varga, an analyst at PVM Oil Associates Ltd., commented: “the weekly US oil statistics were bullish.”
West Texas Intermediate for May delivery was at US$49.65/bbl on the New York Mercantile Exchange, up 14 cents, at 9:30 am in London.
According to the Energy Information Administration (EIA), while projected to fall by 2 million bbls, US gasoline inventories dropped by 3.75 million bbls last week. Concurrently, US refineries processed 16.2 million bbls/d of crude last week, up 425 000 bbls from the prior week, according to the EIA.
Read the article online at: https://www.worldpipelines.com/business-news/30032017/oil-prices-climb/