The light, sweet crude oil contract for May gained slightly and settled above $50/bbl for a second consecutive day on the New York market Mar. 31. Analysts said oil market participants awaited news on compliance with production-cut targets, interrupted Libyan production, and rising US production.
Libyan oil officials said Apr. 3 that production was restarted from an oil field in western Libya. Militia tampered with a pipeline to an export terminal, halting Sharara field production. News of the outage had supported oil prices while Libyan oil supplies were disrupted for about a week.
Libya’s crude production dropped to about 500,000 b/d—the lowest since September 2016. Bloomberg reported Apr. 3 that Libya’s crude production rebounded to 660,000 b/d.
A force majeure on the Zawiya export terminal was lifted Apr. 2 as production resumed at Sharara, Mustafa Sanalla, chairman of Libya’s state-run National Oil Corp., told Bloomberg by phone.
One analyst noted that disruptions caused by militia are getting shorter than in past years.
“Libya had managed to resurrect its production to 700,000 b/d. The national oil company was looking to push that to 1.1 million b/d by August, but unfortunately you will have these stoppages in Libya,” said Harry Tchilinguirian, head of commodity strategy at BNP Paribas SA.
Libya was exempted from production-cut targets by the Organization of Petroleum Exporting Countries and other major producers. The total production-cut target is 1.8 million b/d with OPEC members agreeing to account for 1.2 million b/d. OPEC meets in May to review the targets.
The US rig count jumped 15 units to 824 for the week ended Mar. 31, Baker Hughes Inc. reported. That total was up 374 units from a year ago (OGJ Online, Mar. 31, 2017).
Energy prices
The crude oil contract for May delivery on the New York Mercantile Exchange rose 25¢ on Mar. 31 to close at $50.60/bbl while the June contract gained 29¢ to $51.07/bbl.
The natural gas price for May dropped less than 1¢ to remain at a rounded $3.19/MMbtu. The Henry Hub cash gas price closed Mar. 31 at $3.10/MMbtu, up 3¢.
Heating oil for April was up 1.5¢ to $1.57/gal. Reformulated gasoline stock for oxygenate blending for April climbed almost 2¢ to $1.70/gal.
The Brent crude contract for May on London’s ICE dropped 13¢ to $52.83/bbl, but the June contract was up by 40¢ to $53.53/bbl. The gas oil contract settled at $469.50/tonne on Mar. 31, down 50¢.
The average price for OPEC’s basket of benchmark crudes on Mar. 31 was $50.43/bbl, up 23¢.
Contact Paula Dittrick at [email protected].
