Reuters: Oil rises on Libya force majeure, but demand slowdown holds back market

08:55, 03 July 2018
Economy
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REUTERS

Brent crude oil futures LCOc1 were at $77.71 per barrel at 0217 GMT, up 41 cents, or 0.5 percent, from their last close, Reuters said.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 57 cents, or 0.8 percent, at $74.51.

Read alsoReuters: Oil falls amid rising Saudi output, Asian economic slowdown

"The Libyan power struggle between the Tripoli-based National Oil Corp that is internationally recognized and controls the export sales and the NOC-East group based in Benghazi that currently has physical control of the infrastructure ... wipes out the planned increase from the OPEC+ coalition," said Stephen Innes, Head of Trading for Asia-Pacific at futures brokerage OANDA in Singapore.

OPEC's June output was 32.32 million barrels per day (bpd), a Reuters survey showed on Monday, up 320,000 bpd from May. The June total is the highest since January 2018.

Libya's National Oil Corporation (NOC) declared force majeure on loadings from Zueitina and Hariga ports on Monday, resulting in total production losses of 850,000 bpd due to the closure of eastern fields and ports.

Traders have also been watching U.S. oil production C-OUT-T-EIA, which has surged by 30 percent over the last two years to 10.9 million bpd, absorbing some of the recent disruptions.

Overall, however, analysts said OPEC's production policy as well as unplanned supply disruptions were currently the main price drivers.

"In the near-term, the level of OPEC production – deployment of spare capacity by Saudi Arabia, Iraq, UAE, Kuwait (and ex-OPEC by Russia), and involuntary disruptions in Libya, Venezuela, Iran – are more important drivers of crude prices," Goldman Sachs said in a note published late on Monday.

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