MARKET WATCH: Crude oil futures drop with rising Libyan production

Crude oil prices fell by more than $1/bbl on the New York market July 9 on reports that Libya’s largest oil field had resumed production following the lifting of a force majeure on two ports, Ras Lanuf and Es Sider, which together account for about half of Libya’s oil exports.

Clashes with militants had closed the ports for months. Libia’s National Oil Co. (NOC) said production from Sharara field—usually flowing at 340,000 b/d—reached 120,000 b/d on July 9. Output was expected to reach 200,000 b/d by July 10.

Repsol SA is a partner with NOC in Sharara field.

Regarding underground natural gas storage levels in the Lower 48, the US Energy Information Administration estimated gas levels at slightly above 2 tcf as of July 4, which was a net increase of 93 bcf from the previous week. Stocks were 653 bcf less than last year at this time, and 769 bcf below the 5-year average of a rounded 2.8 tcf, EIA said in its weekly gas storage report.

Energy prices

The New York Mercantile Exchange August crude oil contract dropped $1.11 on July 9, closing at $102.29/bbl. The September contract dropped $1.04 to $101.75/bbl.

The natural gas contract for August fell 3.4¢ to $4.17/MMbtu. On the US cash market, gas at Henry Hub, La., edged down by a penny to $4.15/MMbtu.

Heating oil for August delivery fell less than a cent to remain at a rounded $2.87/gal. Reformulated gasoline stock for oxygenate blending for August delivery dropped 3.5¢ to a rounded $2.94/gal.

The August ICE contract for Brent crude delivery declined by 66¢ to $108.28/bbl. The September contract dropped 59¢ to $108.47/bbl. The ICE gas oil contract for July declined $4.50 to $883/tonne.

The Organization of Petroleum Exporting Countries’ basket of 12 benchmark crudes for July 9 was $105.49/bbl, down 76¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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