Brent crude climbed slightly and futures rose as much as 1 percent; however, the North Sea grade slid 2.5 percent last week. Whereas the reason behind the fall of the North Sea grade is attributed to speculation that the ports, shut since July, would be reopened, Brent crude received a better outlook after news came that Libyan rebels refused to hand over control of three oil ports to the government.
There was a better performance for Brent which gained for January settlement. According to reports, Brent crude jumped as much as $1.11 to $109.94 a barrel on the London-based ICE Futures Europe exchange. It is evident that Brent which used to price more than half the world’s crude, has gained after the Libya obstacle.
Market observers believe that Brent is quite sensitive to global disruptions than WTI and that is what is happening. A trouble in Libyan oil production means a disturbance for the gauge. According to the recent reports Ibrahim Al Jedran, a Libyan rebel leader, the oil-export terminals of Es Sider, Ras Lanuf and Zueitina will remain shut.
Libya has been facing on and off troubles from radical groups in the country and its production has gone down to record levels after Kaddafi was dethroned and killed. According to the new reports coming from the country after the government rejected the conditions of the rebel group which in consequence forced the shutdown.
Libya which has been a regional leader in oil production has faced huge problems and civil strife which has caused decline in the oil output. The country which holds Africa’s largest proven reserves fell to 210,000 barrels a day last month, the lowest level since 2011 and the impact is being seen in the global prices of oil.
The impact of the issues in Libya is though not visible in WTI crude, it has gained some strength as for January delivery it rose 43 cents to $97.03 a barrel on the New York Mercantile Exchange. Similarly, the U.S. benchmark crude was at a discount of $12.79 to Brent when compared with $12.35 on the last trading day of the last week.
A major reason behind the weak WTI crude is that the U.S. has started pumping loads of oil and it is expected to account for about 21 percent of global oil demand this year. The second place is occupied by China which consumes 11 percent.
To contact the reporter of this story: Jonathan Millet at email@example.com