MARKET WATCH: NYMEX, Brent crude oil prices rise on Libya production woes

March 5, 2018
The light, sweet crude oil contract for April rose Mar. 2 to settle above $61/bbl on the New York market while Brent crude oil gained to settle above $64/bbl on the Lonon market.

The light, sweet crude oil contract for April rose Mar. 2 to settle above $61/bbl on the New York market while Brent crude oil gained to settle above $64/bbl on the Lonon market.

Media reports that Libyan production has fallen about 380,000 b/d recently helped support oil prices as oil trading opened in New York Mar. 5.

Reuters reported Libya's giant El Sharara oil field was shut down because a landlord closed a valve in protest of pollution from a pipeline crossing his land. The closure comes days after nearby El Feel oil field also was closed by a protest by security guards over pay.

Giovanni Staunovo, commodities analyst at UBS Wealth Management, called Libya’s production levels “very wobbly,” given repeated supply disruptions and the nation’s unstable politics.

Meanwhile, Venezuela continues to struggle with its economic crisis. Venezuela’s election agency delayed by a month a presidential vote that had been planned for Apr. 22, adding to political and economic uncertainty for the oil-producing country.

Scotiabank issued a research note Mar. 2, saying it believes oil price risk “is now clearly to the upside of our 2018 West Texas Intermediate forecast of $57/bbl given the crude complex’s resilience in the face of what we view as the fundamentally weakest period of the year.”

Crude market fundamentals worldwide are expected to improve, taking prices higher, Scotiabank commodity economist Rory Johnson said.

Separately, the International Energy Agency forecast US crude production by 2023 will reach a record of 12.1 million b/d, which would be 2 million b/d higher than 2018 production.

The IEA’s 5-year forecast showed 6.4 million b/d of new oil production is anticipated by 2023, with almost 60% of it coming from US production.

Energy prices

The April light, sweet crude contract on the NYMEX gained 26¢ on Mar. 2 to settle at $61.25/bbl. The May contract rose 29¢ to $61.09/bbl.

The NYMEX natural gas price for April fell by less than 1¢ to remain at a rounded $2.70/MMbtu. The Henry Hub cash gas price was up 2¢ to $2.63/MMbtu on Mar. 2.

Ultralow-sulfur diesel for April decreased by less than 1¢ to a rounded $1.88/gal. The NYMEX reformulated gasoline blendstock for April rose less than a penny to remain at a rounded $1.90/gal.

Brent crude oil for May settled up 54¢ to $64.37/bbl on London’s International Commodity Exchange. The June contract was up 52¢ to $64.11/bbl. The gas oil contract for March was $563.25/tonne, up $1.50.

OPEC’s basket of crudes was $61.58/bbl on Mar. 2, down 60¢.

Contact Paula Dittrick at [email protected].