Connect with us

Commodities

Libya Reopens Biggest Oil Field, Giving OPEC+ a New Headache By Bloomberg

Published

on


© Reuters. Libya Reopens Biggest Oil Field, Giving OPEC+ a New Headache

(Bloomberg) — Libya took a major step toward reviving its battered oil industry by reopening its biggest field, presenting a new headache for OPEC+ as the alliance of major producers tries to curb global supplies.

The National Oil Corp., Libya’s state energy company, lifted force majeure on the western deposit of Sharara and instructed its operator to resume production, according to a statement on Sunday. The field will initially pump 40,000 barrels of crude a day, before reaching its capacity of almost 300,000 barrels next week, a person with knowledge of the situation said.

That would double overall output in Libya to around 600,000 barrels daily, said the person, who asked not to be identified because they aren’t authorized to speak to media.

Crude from Sharara has begun reaching storage tanks at the port of Zawiya, another person said.

Sharara’s reopening follows a truce in Libya’s long-running civil war that’s already led to many oil fields and ports in the east starting up after an almost total shutdown since January.

The NOC didn’t mention the nearby deposit of El Feel, or Elephant in Arabic. The 70,000-barrel-a-day field normally follows Sharara’s shutdowns and restarts because it relies on electricity from its bigger neighbor to operate.

Headwind for OPEC

Libya is an OPEC+ member and home to Africa’s largest crude reserves. But it’s exempt from the group’s supply cuts, initiated in May as the coronavirus pandemic stifled economies and caused oil prices to tank. The alliance, led by Saudi Arabia and Russia, planned to ease the curbs by 2 millions barrels a day from the start of 2021.

Yet with virus cases accelerating in many countries, the cartel faces a difficult decision at its next policy meeting on Nov. 30-Dec. 1: whether to stay the course or delay the increase in production. Benchmark has more than doubled to around $42.25 a barrel since May, but it’s still down 36% this year.

“The Libyan oil restart is gaining momentum faster than most people expected,” said Bill Farren-Price, a director at energy analysis firm Enverus. The likelihood of more Libyan exports is “an additional headwind for OPEC at a time when it is already grappling with softer than expected demand as the second wave of Covid-19 intensifies.”

JPMorgan Chase (NYSE:) & Co. forecasts that production will rise to 1 million barrels daily by March.

Still, the North African nation’s energy infrastructure is crumbling after almost 10 years of conflict and chaos following the ouster of former dictator Muammar Qaddafi in 2011. Frequent shutdowns and a lack of nuts-and-bolts servicing have left pipelines corroding and storage tanks collapsing. The NOC’s chairman, Mustafa Sanalla, told Bloomberg in June it would cost more than $100 million to fix wellheads alone, limiting the nation’s ability to ramp up production quickly.

Force majeure is a legal status protecting a party that can’t fulfill a contract for reasons beyond its control. Sharara is run as a joint venture between the NOC, France’s Total SE, Spain’s Repsol (OTC:) SA, Austria’s OMV AG and Norway’s Equinor ASA (NYSE:).

The NOC, based in the Libyan capital of Tripoli, said it reached a “gentlemen’s agreement” with militias known as the Petroleum Facilities Guard who were active near Sharara. The militias are obliged to “end all obstacles” hindering operations at the field, the NOC said. That came after United Nations-sponsored talks this month in Egypt, which were partly about restoring security at Libya’s oil facilities.

Libya was producing 1.2 million barrels a day last year. Khalifa Haftar, a Russian-backed commander who controls much of the east, blockaded ports and fields in mid-January as he attempted to unseat the UN-supported government in Tripoli. That caused output to slump to less than 100,000 barrels a day, most of it from offshore fields.

(Updates from fifth paragraph with details of el-Feel oil field.)

©2020 Bloomberg L.P.

 





Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Commodities

Oil Down 3% on Week on U.S. Rig Climb, Libya Supply Prospects By Investing.com

Published

on

By


© Reuters.

By Barani Krishnan

Investing.com – U.S. crude draw numbers aren’t helping oil prices as investors zero in on the climbing rig count and prospects of Libyan supplies returning in a big way.

Both West Texas Intermediate, the key indicator for crude prices in the United States, and Brent, the global benchmark for oil, fell about 3% on the week after the rose to 211 from last week’s level of 205. 

Oil rigs, an indicator of future production, have steadily climbed since the week ended Sept 4, when they stood at 180.

Adding to the weight on the market were estimates that Libyan oil output, mostly offline since January, had risen to 500,000 barrels per day and will likely grow further by end-October.

“Low sales and bad margins tells me that crude buying could disappear in the U.S. until Q1,” said Scott Shelton, energy futures broker at ICAP (LON:) in Durham, North Carolina.

New York-traded settled at $39.85 per barrel, down 79 cents, or 1.9%. For the week, WTI fell 2.5%.

London-traded settled at $41.77, down $1.16, or 2.7%.

fell 1 million barrels for the week ended Oct. 18, falling largely within the expected draw of 1.02 million barrels, the U.S. Energy Information announced on Wednesday.

Crude stored at , Oklahoma, delivery point for contracted barrels of WTI also rose within expectations, climbing by 975,000 barrels versus the forecast 1.1 million barrels.

But jumped by 1.9 millions barrels — an 180-degree build over analysts’ estimates.

The EIA did deliver a positive number on , which drew down by 3.8 million barrels, or double expectations. This was ostensibly due to the strong delivery-and-trucking activity as many people remained cloistered in their homes ordering everything from clothing to groceries. 

But the agency also surprised traders by estimating that U.S. crude production fell by 9.9 million barrels per day last week, down 600,000 bpd from the previous week. 

The drop in production jarred with the rise in oil rigs logged since mid-September, leading some to think the impact on output from this month’s Hurricane Delta had been overestimated. Delta, which struck Louisiana as a Category 2 storm, shuttered nearly 92% of all oil production in the U.S. Gulf of Mexico.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link

Continue Reading

Commodities

China’s purchases of U.S. farm goods at 71% of target under trade deal: U.S. By Reuters

Published

on

By


2/2
© Reuters. Senate Finance Committee hearing on U.S. trade on Capitol Hill in Washington

2/2

WASHINGTON (Reuters) – China has substantially increased purchases of U.S. farm goods and implemented 50 of 57 technical commitments aimed at lowering structural barriers to U.S. imports since the two nations signed a trade deal in January, the U.S. government said on Friday.

In a joint statement, the U.S. Trade Representative’s (USTR) office and the U.S. Department of Agriculture (USDA) said China had bought over $23 billion in U.S. agricultural goods to date, or about 71% of the target set under the so-called Phase 1 deal.

“Since the Agreement entered into force eight months ago, we have seen remarkable improvements in our agricultural trade relationship with China, which will benefit our farmers and ranchers for years to come,” U.S. Trade Representative Robert Lighthizer said in a statement.

The deal defused a bitter trade war between the world’s two largest economies, but disputes over human rights, the COVID-19 crisis and technology have strained ties between Washington and Beijing, raising doubts about the prospects for deepening the agreement in a second phase.

Agriculture is one of the four areas where China pledged to increase its purchases of U.S. goods and services. Many experts question whether China will meet its overall targets this year given lockdowns imposed earlier this year to contain the virus.

The report showed outstanding sales of U.S. corn to China were at an all-time high of 8.7 million tons, while U.S. soybeans sales for marketing year 2021 to China were at double the levels seen in 2017.

U.S. exports of sorghum to China from January to August 2020 totaled $617 million, up from $561 million for the same period in 2017, it said.

U.S. pork exports to China hit an all-time record in just the first five months of 2020, and U.S. beef and beef products exports to China through August 2020 are already more than triple the total for 2017, it said.

In addition to these products, USDA expects 2020 sales to China to hit record or near-record levels for other U.S. agricultural products including pet food, alfalfa hay, pecans, peanuts, and prepared foods.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





Source link

Continue Reading

Commodities

Democrats in U.S. drilling states push back against Biden oil remarks By Reuters

Published

on

By


© Reuters. Final 2020 U.S. presidential campaign debate in Nashville

By Nichola Groom

(Reuters) – Democratic candidates in oil drilling states were quick to distance themselves on Friday from comments by their party’s presidential candidate, Joe Biden, that indicated he would move the United States away from a reliance on oil.

From Texas to Montana, Democrats locked in tight congressional races in Nov. 3’s general election took to Twitter to affirm their support for the fossil fuel industries and workers in their states.

“I’ll always stand up to my party when it’s out of touch with our Montana way of life,” Governor Steve Bullock, who is running for U.S. Senate, tweeted on Friday.

President Donald Trump, who trails Biden in national opinion polls, accused his rival in their final presidential debate on Thursday of planning to destroy the oil industry, leading the former vice president to respond that he did believe the country should eventually replace oil with solar, wind and other forms of non-polluting power.

“I would transition from the oil industry, yes,” Biden said.

“He is going to destroy the oil industry,” Trump said. “Will you remember that Texas? Will you remember that Pennsylvania, Oklahoma, Ohio?”

After the debate, Biden told reporters he was referring to a plan to stop subsidizing fossil fuels: “… they’re not going to lose their jobs. Besides, a lot more jobs are going to be created in other alternatives.”

Trump’s campaign seized on Biden’s remarks, promoting a new advertisement on Friday that said thousands of drilling jobs were at stake in the battleground state of Pennsylvania.

“I disagree with VP Biden’s statement tonight,” Democratic Representative Xochitl Torres Small, whose district includes portions of New Mexico’s oil-rich Permian basin, tweeted after the debate, saying the country should not “demonize a single industry.”

Polls show Torres Small in a tight race against Republican opponent Yvette Herrell, who she narrowly unseated in 2018.

Torres Small said she was willing to break with her party on the issue, a sentiment echoed by Bullock, who briefly sought the Democratic presidential nomination himself, and U.S. Representative Kendra Horn of Oklahoma.

U.S. Representative Lizzie Fletcher, a Democrat running for re-election in Houston, the capital of the U.S. oil industry, said in a statement that Biden’s comments “fail to address the complexity of our energy needs and plan for our future.”

Biden says his $2 trillion plan to combat climate change through investment in clean energy will create millions of jobs, a stark contrast to Trump administration policies that promote fossil fuel development and play down the threat of climate change.

Nationally, Biden’s plan enjoys the support of two-thirds of voters, according to a New York Times/Siena College poll this month. But in states where the oil industry is a major employer, many voters are skeptical of a move away from fossil fuels.

Democratic vice presidential nominee Kamala Harris said Trump was blowing her running mate’s comments out of proportion.

“The president likes to put everything out of context,” the California senator said at a campaign stop in Atlanta.





Source link

Continue Reading

Trending

Copyright © 2017 Zox News Theme.