Crude oil prices on the New York market extended a rally to a second week after the US government reported a drop in the weekly US oil inventory for the week ended Feb. 16, and also on news reports that a Libyan oil field halted production over a worker protest.
Both the US and Brent crude oil benchmarks settled Feb. 23 at their highest levels since Feb. 5. Light, sweet crude for April delivery was $63.55/bbl on the New York market. Brent for April was just above $67.30/bbl in London.
The US Energy Information Administration reported crude oil supplies, excluding the Strategic Petroleum Reserve, fell by 1.6 million bbl for the week ended Feb. 16, marking the first time the US oil inventory had declined in 4 weeks.
On world oil markets, Libya’s National Oil Corp. (NOC) declared force majeure on the 70,000-b/d El Feel oil field after a protest by guards closed the field.
Reuters reported the guards withdraw from the field to push their demands over pay and other benefits. Oil workers were evacuated.
A joint venture of NOC and Italy’s Eni SPA operates the field. El Feel crude is blended with Wafa field condensate to form the Mellitah blend, which is exported from Mellitah terminal.
NOC said it declared force majeure on Feb. 23 after “members of Fazzan group from the Petroleum Facility Guards (PFG) threatened workers, entered the administrative offices in the field, tampered with official papers of the field administration, and fired in the air.”
In a statement, NOC Chairman Mustafa Sanalla said it was the Ministry of Defense’s responsibility to respond to the guards’ demands. He also said claims are increasing from PFG workers or people claiming to be PFG workers.
“The NOC supplies the PFG members in the field with fuel and supplies but cannot supply hundreds of those who claim to be members of the PFG in areas far and away from the scope of the oil sector operations,” he said.
Despite repeated shutdowns and blockades at oil fields and terminals across the country, NOC raised Libya’s production to more than 1 million b/d during 2017, the highest production since 2013.
But analysts said Libya’s production remains below its peak of 1.6 million b/d set before a 2011 uprising in Libya.
Energy prices
The April light, sweet crude contract on the New York Mercantile Exchange rose 78¢ on Feb. 23 to settle at $63.55/bbl. The May contract gained 81¢ to $63.41/bbl.
The NYMEX natural gas price for March edged down less than 1¢ to a rounded $2.62/MMbtu. The Henry Hub cash gas price was down 5¢ to $2.55/MMbtu on Feb. 23.
Ultralow-sulfur diesel for March increased by a rounded 2¢ to a rounded $1.97/gal. The NYMEX reformulated gasoline blendstock for March gained 4¢ to a rounded $1.81/gal.
Brent crude oil for April settled up 92¢ to $67.31/bbl on London’s International Commodity Exchange. The May contract was up 93¢ to $67.04/bbl. The gas oil contract for March was $591/tonne, up $6.
The Organization of Petroleum Exporting Countries’ basket of crudes was $64.16/bbl on Feb. 23, up $1.08.
Contact Paula Dittrick at [email protected].
