Libya force majeure pushes up oil, US crude hits highest since late 2014

Libya’s National Oil Corporation declared force majeure on loadings from Zueitina,above, and Hariga ports on Monday, resulting in 850,000 bpd of supplies being disrupted. (Reuters)
Updated 03 July 2018
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Libya force majeure pushes up oil, US crude hits highest since late 2014

SINGAPORE: Oil prices rose on Tuesday after Libya declared force majeure on some of its supplies, while an ongoing Canadian outage lifted US crude to levels not seen since late 2014.
US West Texas Intermediate (WTI) crude futures were at $74.73 at 0724 GMT, up 79 cents, or 1.1 percent, from their last settlement. They earlier marked their strongest since November 2014 at $74.84 a barrel.
Traders said this was largely due to an expected fall in North American fuel inventories following the 350,000-barrel-per-day (bpd) Syncrude outage in Canada.
Outside North America, Brent crude oil futures were at $77.77 per barrel, up 44 cents, or 0.6 percent.
“Oil bulls seem to have returned after Libya suspended oil exports from two key ports,” said Hussein Sayed, chief market strategist at futures brokerage FXTM.
“If Libya’s oil doesn’t return fast to the market it will be an important test to OPEC’s spare capacity, especially given that output from Venezuela and Iran is expected to fall significantly in the next couple of months,” he added.
The Organization of the Petroleum Exporting Countries (OPEC) saw June output at 32.32 million bpd, a Reuters survey showed on Monday, up 320,000 bpd from May. The June total is the highest since January 2018.
The UAE’s Abu Dhabi National Oil Co. (ADNOC), a major producer within OPEC, said on Tuesday it is able to increase production by several hundred thousand bpd if needed.
However, Libya’s National Oil Corporation (NOC) declared force majeure on loadings from Zueitina and Hariga ports on Monday, resulting in 850,000 bpd of supplies being disrupted.
Outside the supply-side, a slowdown in demand is emerging, potentially ending years of consecutive records.
“US petroleum demand growth slowed significantly to 385,000 bpd year-on-year in April, compared with a growth of more than 730,000 bpd year-on-year in Q1,” Barclays bank said, adding that this was mostly due to higher fuel prices.
In Asia, the world’s top oil consuming region, seaborne oil imports have been falling since May, as higher costs turned off consumers and as the escalating trade dispute between the United States and China starts to impact the economy.
Chinese stocks went into a tail spin on Tuesday as turbulence gripped equity markets in Asia, which sank to nine-month lows as investors feared the Sino-US trade row could derail a rare period of synchronized global growth.
“There are ... signs that growth in China has slowed in recent months, particularly infrastructure spending by local governments. I would assume that infrastructure investment is quite energy intensive, so perhaps that had a knock-on effect to oil demand,” said Frederic Neumann, Co-Head of Asian Economic Research at HSBC in Hong Kong.
“At this stage, however, it appears more that growth in Asia is softening, rather than decelerating sharply,” he added.


Toyota recalls 70,000 vehicles to replace air bag inflators

Updated 12 December 2018
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Toyota recalls 70,000 vehicles to replace air bag inflators

  • Takata uses the chemical ammonium nitrate to create a small explosion and inflate the bags
  • Can deteriorate and burn too fast, blowing apart a metal canister

DETROIT: Toyota is recalling about 70,000 Toyota and Lexus brand vehicles in North America to replace air bag inflators that could explode and hurl shrapnel at drivers and passengers.
The recall covers the 2003 to 2005 Corolla, the 2002 to 2005 Sequoia, the 2003 to 2005 Tundra and the 2002 to 2005 Lexus SC.
Takata uses the chemical ammonium nitrate to create a small explosion and inflate the bags. But it can deteriorate and burn too fast, blowing apart a metal canister.
The Toyota and Lexus vehicles were recalled previously and the inflators replaced with new ones that still used ammonium nitrate. In the latest recall, Toyota will use inflators made by another company with a safer chemical.
Owners will be notified early next year. Toyota says it has replacement parts available.
About 65,000 of the recalled vehicles are in the US
Toyota says it’s doing the recall a year ahead of a schedule set by the US National Highway Traffic Safety Administration.
At least 23 people have died worldwide due to the problem caused by inflators made by Takata Corp., resulting in the largest series of auto recalls in US history. They cover 37 million vehicles and about 50 million inflators in the US About 100 million inflators are being recalled worldwide.
The recalls forced Takata of Japan to seek bankruptcy protection.