Sun, Mar 05, 2017 - Page 14 News List

Oil rebounds on news extremists took Libya port

Bloomberg

Oil rose from a three-week low amid reports that Shura Council of Benghazi Revolutionaries forces captured Libya’s biggest oil port.

Futures advanced 1.4 percent in New York on Friday after three days of declines.

The Muslim extremist militias on Friday afternoon captured Sidra, Libya, as fighting escalated, according to two people with knowledge of the matter who asked not to be identified, because they are not authorized to speak to the media.

Prices have been oscillating between US$50 and US$55 per barrel this year, as output curbs by some producers is tempered by surging US supply.

As investors assess whether US supply gains will jeopardize efforts by OPEC and other nations to ease a glut, price swings have been subdued and a measure of volatility slipped to the lowest since October 2014.

Data this week showed that US output has increased to the highest in almost a year, while Saudi Arabia last month cut oil supply by 90,000 barrels per day from a month earlier.

Russian production was little changed last month, Russian government data showed.

“This increases the likelihood of a supply disruption,” said Bill O’Grady, chief market strategist at St Louis, Missouri-based Confluence Investment Management, which oversees US$6.1 billion.

“One thing we’ve learned about oil states is that whenever there’s a new leader, they end up selling oil too, but it takes time,” he said.

West Texas Intermediate for delivery next month rose US$0.72 to settle at US$53.33 per barrel on the New York Mercantile Exchange on Friday.

The contract on Thursday fell 2.3 percent to US$52.61, the lowest close since Feb. 8.

Front-month futures on Friday slipped 1.2 percent for the week. Total volume traded was about 32 percent less than the 100-day average.

Brent for May settlement on Friday increased US$0.82, or 1.5 percent, to US$55.90 per barrel on the London-based ICE Futures Europe exchange.

The global benchmark crude on Friday closed at a US$2.12 premium to May West Texas Intermediate.

Futures extended gains in late trading, as the US dollar retreated against its peers. A weaker US currency boosts the appeal of US dollar-denominated assets.

Saudi Arabia, the world’s biggest crude oil exporter, last month pumped 9.78 million barrels per day, a Bloomberg News survey showed.

OPEC’s daily output last month fell to 32.17 million barrels, a 65,000 barrel per day drop from January, the first month of the accord, largely because the kingdom went beyond its target.

Crude inventories in the US last week rose to 520.2 million barrels, the most in data going back to 1982, the US Energy Information Administration reported on Wednesday.

Crude output climbed to 9.03 million barrels per day, the highest since March last year, while the US oil rig count this week rose by seven to 609, the highest since October 2015, Baker Hughes Inc data showed.

Iraqi oil shipments of about 105,000 barrels per day were on Thursday halted briefly after Kurdish troops seized control of a pumping station in the disputed Kirkuk Governorate and demanded that crude shipments to the country’s central government be stopped.

Vitol Group BV is offering to sell Nigerian crude oil from a storage terminal in South Africa, five traders familiar with the matter said, in what might be a signal that the global supply glut is beginning to ease.

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