The latest news from Libya is that crude oil loadings have resumed its Zawiya export terminal for the first time in nearly a month. Now oil operations will continue to return to normal in the western part of the crisis-hit North African country. Earlier strikes and protests across Libya and its oil infrastructure almost paralyzed the industry which caused heavy losses for the country.
According to some estimates Libya was unable to continue its oil production throughout the summer due to these protests and that caused a lot of loss as production fell to 200,000 b/d. However, now that country has restarted its two key oil fields, Sharara and Elephant (El Feel) in western Libya, crude could again flow to Zawiya for export.
Resumption of Libyan crude oil production is being seen as a positive development in the European crude market. It will be a positive step forward in the return of Libyan exports to the larger Mediterranean market which decreased to a record level post-Kaddafi.
However, skeptics view this just a partial success as only two Sharara and Elephant (El Feel) in western Libya have resumed crude production so far. On the other hand, several other observers believe that Sharara which has a production capacity of about 350,000 b/d, has started production under Akakus, a joint venture between state-owned NOC and Repsol, is a positive indication.
Similarly, output in Nigeria, Africa’s largest crude-producing country, has also increased to 2.4 million barrels a day after sabotaged lines were restarted.
As Middle-East Situation Eases, West Texas Intermediate Crude Falls
West Texas Intermediate or WTI crude fell to the lowest close in eight weeks amidst the news that US – Iran relations are heading towards normalization after decades. The apprehension about the American military strike on Syria has receded further.
Market observers are of opinion that the market is reacting to speculation that the US is on the verge of a breakthrough in the Middle East and some peaceful way-out has better opportunity now.
The latest data show that WTI crude for November delivery declined 46 cents to $103.13 a barrel on the NYME (New York Mercantile Exchange). The current value is the lowest settlement since July 30.
To contact the reporter of this story: Jonathan Millet at email@example.com