MARKET WATCH: Explosion in Libya sends oil prices to 2-year highs

Light, sweet crude oil on the New York market and Brent on the London market settled at 2-year highs Dec. 26 after news reports of a pipeline explosion in Libya.

Light, sweet crude oil on the New York market and Brent on the London market settled at 2-year highs Dec. 26 after news reports of a pipeline explosion in Libya.

The US crude oil contract for February settled at nearly $60/bbl, its highest since June 2015. The Brent contract for February settled just above $67/bbl, its highest since May 2015.

A Dec. 26 explosion on a pipeline leading to Es Sider is expected to reduce oil production in Libya by up to 100,000 b/d, National Oil Co. said on its web site. NOC was investigating cause of the explosion.

The Libya incident follows the temporary closing of a North Sea pipeline system earlier this month.

Brent prices jumped after a crack was found on part of the Forties system. The pipeline owner, Ineos, issued a statement Dec. 26 saying the crack was repaired and pressure testing was under way.

A few customers are sending low volumes through the pipeline. Ineos said it expects the system will be operating at normal levels in January.

Meanwhile, the US Energy Information Administration was scheduled to release its weekly US commercial crude oil and product inventories on Dec. 28, one day later than normal because of the Christmas holiday. Markets were closed on Dec. 25.

Energy prices

The January 2018 light, sweet crude contract on the New York Mercantile Exchange gained $1.50 on Dec. 26 to $57.97/bbl. The February contract increased by $1.46 to $60/bbl.

The NYMEX natural gas price for January 2018 dropped 2¢ to a rounded $2.64/MMbtu. The Henry Hub cash gas price was $2.70/MMbtu.

Ultralow-sulfur diesel for January 2018 gained nearly 7¢ to a rounded $2.04/gal. The NYMEX reformulated gasoline blendstock for January 2018 rose 2.4¢ to a rounded $1.78/gal.

The Brent crude contract for February 2018 on London’s ICE climbed $1.77 to $67.02/bbl. The March 2018 contract gained $1.73 to $66.46.

The gas oil contract for January was $599/tonne.

OPEC’s basket of crudes was $62.16/bbl on Dec. 20, up 44¢.

Contact Paula Dittrick at paulad@ogjonline.com.

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