Oil prices rise on tightening supply, strong demand

A mooring station for oil tankers can be seen at the Trans-Alaska Pipeline Marine Terminal in Valdez, Alaska, in this file photo. (REUTERS)
Updated 23 October 2017
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Oil prices rise on tightening supply, strong demand

SINGAPORE: Oil prices rose on Monday over supply concerns in the Middle East and as the US market showed further signs of tightening while demand in Asia keeps rising.
Brent crude futures, the international benchmark for oil prices, were at $57.84 at 0056 GMT, up 9 cents, or 0.16 percent, from their last close.
US West Texas Intermediate (WTI) crude futures were at $52.03 per barrel, up 19 cents, or 0.37 percent.
“Oil prices are holding comfortably above $50 as possible supply disruptions in the Kurdish region of Iraq support prices,” said William O’Loughlin, investment analyst at Rivkin Securities.
“US production was also recently impacted by a hurricane for the second time in as many months and the number of US drilling rigs declined for the third week in a row,” O’Loughlin said.
The amount of US oil rigs drilling for new production fell by seven to 736 in the week to Oct. 20, the lowest level since June, General Electric Co’s Baker Hughes energy services firm said on Friday.
Much will depend on demand to guide prices, with the US market tightening, flows from Iraq reduced due to fighting between government forces and Kurdish militant groups, and production still being withheld as part of a pact between the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers to tighten the market.
In the main growth areas of Asia, consumption remains strong especially in China and India, the world’s number one and three importers.
India imported a record 4.83 million barrels per day (bpd) of oil in September as several refiners resumed operations after extensive maintenance to meet rising local fuel demand.
The country’s September imports stood 4.2 percent above this time last year and about 19 percent more than in August, ship-tracking data from industry sources and Thomson Reuters Analytics showed.
Given the tightening oil market conditions, many analysts expect prices to rise further.
“We will see oil prices higher by 10 percent by the end of the year. We have started to accumulate strong positions within the oil sector,” said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers.


Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

Updated 14 December 2018
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Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

  • Ransom payment would set dangerous precedent
  • NOC declared force majeure on exports on Monday

BENGHAZI: Libya’s state-owned National Oil Corp. (NOC) said it was against paying a ransom to an armed group that has halted crude production at the country’s largest oilfield.
“Any attempt to pay a ransom to the armed militia which shut down El Sharara (oilfield) would set a dangerous precedent that would threaten the recovery of the Libyan economy,” NOC Chairman Mustafa Sanalla said in a statement on the company’s website.
NOC on Monday declared force majeure on exports from the 315,000-barrels-per-day oilfield after it was seized at the weekend by a local militia group.
The nearby El-Feel oilfield, which uses the same power supply as El Sharara, was still producing normally, a spokesman for NOC said, without giving an output figure. The field usually pumps around 70,000 bpd.
Since 2013 Libya has faced a wave of blockages of oilfields and export terminals by armed groups and civilians trying to press the country’s weak state into concessions.
Officials have tended to end such action by paying off protesters who demand to be added to the public payroll.
At El Sharara, in southern Libya, a mix of state-paid guards, civilians and tribesmen have occupied the field, camping there since Saturday, protesters and oil workers said. The protesters work in shifts, with some going home at night.
NOC has evacuated some staff by plane, engineers at the oilfield said. A number of sub-stations away from the main field have been vacated and equipment removed.
The occupiers are divided, with members of the Petroleum Facilities Guard (PFG) indicating they would end the blockade in return for a quick cash payment, oil workers say. The PFG has demanded more men be added to the public payroll.
The tribesmen have asked for long-term development funds, which might take time.
Libya is run by two competing, weak governments. Armed groups, tribesmen and normal Libyans tend to vent their anger about high inflation and a lack of infrastructure on the NOC, which they see as a cash cow booking billions of dollars in oil and gas revenues annually.