Oil prices get boost from rebound in global stock markets

The Organization of the Petroleum Exporting Countries said on Monday it expected world oil demand to climb by 1.59 million barrels per day this year. (Reuters)
Updated 13 February 2018

Oil prices get boost from rebound in global stock markets

SINGAPORE: Oil prices rose on Tuesday, lifted by a rebound in global stock markets that followed sharp falls last week.
US West Texas Intermediate (WTI) crude futures were at $59.65 a barrel at 0724 GMT. That was up 36 cents, or 0.6 percent, from their last settlement.
Brent crude futures were at $62.99 per barrel, up 40 cents, or 0.6 percent, from the previous close.
“Oil markets attempted a half-hearted recovery overnight on little more than an equity market correlated bounce,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.
Stock markets were roiled last week by some of the sharpest falls on record, shaking confidence across markets.
With markets seemingly returning to calmer waters, oil traders said attention was turning to inventory levels to gauge crude supply levels.
“The change in inventories this week will be crucial for determining whether further declines in the oil price are on the cards,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.
The private American Petroleum Institute is due to publish crude inventory estimates on Tuesday, while the government US Energy Information Administration (EIA) is set to release its fuel storage and crude production data on Wednesday.
On the demand side, the Organization of the Petroleum Exporting Countries (OPEC) said on Monday it expected world oil demand to climb by 1.59 million barrels per day (bpd) this year, an increase of 60,000 bpd from the previous forecast, reaching 98.6 million bpd.
The rising consumption is being met by increased output from outside OPEC, the Middle East dominated producer club said.
OPEC said the United States and other outside producers would boost supply by 1.4 million bpd this year, up 250,000 bpd from last month and the third consecutive rise from 870,000 bpd in November.
OPEC said because of non-OPEC production growth, oil markets would only return to a supply and demand balance “toward the end of this year.”
In an effort to tighten markets and prop up prices, OPEC and a group of other producer including Russia have been withholding supplies since 2017. The cuts are scheduled to last through 2018.
EIA data shows that world oil markets were in a supply deficit in 2017, due in large part to the OPEC-led supply cuts, but the data shows an expected return of a surplus for large parts of this year.
Sukrit Vijayakar, director of consultancy Trifecta Energy, said that his view on oil prices was “decidedly bearish” given all the market fundamentals.


Libyan state oil firm warns against export blockade

Updated 18 January 2020

Libyan state oil firm warns against export blockade

  • The NOC issued a statement saying it “strongly condemns calls to blockade oil ports ahead of the Berlin Conference on Sunday”
  • Tribes close to eastern Libya-based military strongman Khalifa Haftar had called for a blockade of coastal oil export terminals

TRIPOLI: Libya’s National Oil Company warned Friday against threats to block oil exports, the war-torn country’s main income source, two days before a Berlin conference aimed at relaunching a peace process.
Tribes close to eastern Libya-based military strongman Khalifa Haftar had called for a blockade of coastal oil export terminals to protest a Turkish intervention against Haftar in the country’s grinding conflict.
The NOC later issued a statement saying it “strongly condemns calls to blockade oil ports ahead of the Berlin Conference on Sunday.”
Turkey has backed the Tripoli-based Government of National Accord as it faces an offensive by Haftar’s forces to seize the capital from what he calls “terrorists” supporting the GNA.
After months of combat, which has killed more than 2,000 people, a cease-fire came into effect Sunday backed by both Ankara and Moscow, which is accused of supporting Haftar.
However, after Turkey deployed troops to support the United Nations-recognized GNA, tribes close to Haftar threatened to close down the “oil crescent” — a string of export hubs along Libya’s northeastern coast under Haftar’s control since 2016.
His troops have also mobilized to block any counter-attack on the oil crescent, the conduit for the majority of Libya’s crude exports.
“The closure of the fields and the terminals is purely a popular decision. It is the people who decided this,” spokesman for pro-Haftar forces Ahmad Al-Mismari told Al-Hadath television late Friday.
The tribes also called for the “immediate” closure of the Mellitah, Brega and Misrata pipelines.
The head of the eastern Zouaya tribe told AFP that blocking exports would “dry up the sources of funding for terrorism via oil revenues.”
NOC chairman Moustafa Sanalla said the oil and gas sector is “vital” for the Libyan economy, as it is the “single source of income for the Libyan people.”
“The oil and the oil facilities belong to the Libyan people. They are not cards to be played to solve political matters,” he added.
“Shutting down oil exports and production will have far-reaching and predictable consequences.”
The oil-rich North African state has been in turmoil since a 2011 NATO-backed uprising that overthrew and killed dictator Muammar Qaddafi.
Its oil sector, which brings in almost all of the state’s revenues, has frequently been the target of attacks.
Sanalla said the consequences of exports and production being shut down for an extended period could be devastating.
“We face collapse of the exchange rate, a huge and unsustainable increase in the national deficit, the departure of foreign contractors, and the loss of future production, which may take years to restore,” he said.
“This is like setting fire to your own house.”