MARKET WATCH: Oil futures drop on expected resumption in Libyan supply
Crude oil futures prices fell on New York and London markets Apr. 7 on expectations that two eastern Libyan ports that export oil would be reopened soon, increasing world oil supplies.
On Apr. 6, Libyan government officials and rebels indicated they had reached an agreement to reopen two terminals that together normally export an estimated 200,000 b/d, mostly to Europe.
Meanwhile, analysts noted previously reported agreements have fallen apart. Many analysts advocated a cautious approach regarding the pace and volume of Libyan oil exports. Unrest and labor disputes have blocked some eastern Libya terminals and limited some production since last summer.
Recent resumption in some oil production has proved temporary given continued political unrest.
Libya’s Atty. Gen. Abdulqader Radwan told The Wall Street Journal that government representatives reached an agreement to reopen the ports of al-Hariga and Zueitina.
“The problem [of port closures] has been partially solved,” Radwan said. He noted that negotiations continue to reopen two larger ports, Es Sider and Ras Lanuf.
Meanwhile, a political group led by militia leader Ibrahim al-Jathrana reportedly hosted a news conference on Apr. 6, confirming an agreement regarding al-Hariga and Zueitina.
The May natural gas contract gained 3.7¢ to a rounded $4.48/MMbtu. The Henry Hub cash price for gas was unavailable on Apr. 7.
Heating oil for May delivery dropped 1.7¢ to a rounded $2.89/gal. Reformulated gasoline stock for oxygenate blending for May delivery decreased about half a cent to remain at a rounded $2.93/gal.
In London, the May ICE contract for Brent crude delivery dropped 90¢ to close at $105.82/bbl. The June contract was up 81¢ to $105.82/bbl. The ICE gas oil contract for April dipped $8 to $885.50/tonne.
The Organization of Petroleum Exporting Countries reported its basket of 12 benchmark crudes was $102.16/bbl on Apr. 7, declining 96¢.
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