Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Oil prices fall after Haftar signals Libya output to resume

Published 09/17/2020, 09:55 PM
Updated 09/18/2020, 08:02 AM
© Reuters. The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County

© Reuters. The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County

By Shadia Nasralla

LONDON (Reuters) - Oil prices edged lower on Friday after Libyan commander Khalifa Haftar said a blockade on Libyan oil exports, which has been in place since January, would be lifted.

Erasing gains made in earlier Asian and European trading hours, Brent crude (LCOc1) was down 20 cents at $43.10 a barrel by 1125 GMT while U.S. oil futures (CLc1) fell 20 cents to $40.77.

The benchmarks were still set for weekly gains after Hurricane Sally cut U.S. production, Saudi Arabia pressed allies to stick to production quotas and banks including Goldman Sachs (NYSE:GS) predicted a supply deficit.

Haftar's comments came after Libya's National Oil Corporation, not controlled by Haftar, said overnight it would not lift force majeure on exports until oil facilities were demilitarised.

Pre-blockade Libya was producing around 1.2 million bpd. It is unclear, however, how quickly Libya could reach that level again.

Earlier, Goldman Sachs predicted a market deficit of 3 million barrels per day (bpd) by the fourth quarter and reiterated its target for Brent to reach $49 by the end of the year and $65 by the third quarter of 2021.

Swiss bank UBS also pointed to the possibility of undersupply, forecasting Brent would rise to $45 a barrel in the fourth quarter and to $55 by mid-2021.

The Organization of the Petroleum Exporting Countries and other producers, a group known as OPEC+, are cutting output by 7.7 million bpd and stressed at a meeting on Thursday that it would take action against members not complying with the deal.

The Saudi Arabian energy minister said those who gamble on oil prices would be hurt "like hell".

"We think (OPEC+) will put on hold plans to taper the cut down to 5.8 million bpd ... when the entire group convenes again in December," RBC analysts said.

Saudi Arabia said an earlier meeting was possible if oil prices fell alongside demand because of a second wave of coronavirus cases.

"Yesterday’s enthusiasm was not a one-off event. The market now feels the ground more stable to maintain $40+ price levels," said Rystad's Head of Oil Markets Bjornar Tonhaugen.

In the Gulf of Mexico, U.S. producers started rebooting idle rigs following a five-day closure due to Hurricane Sally.

© Reuters. FILE PHOTO: The logo of the Organisation of the Petroleum Exporting Countries (OPEC) sits outside its headquarters in Vienna

A tropical depression in the western part of the Gulf of Mexico could become a hurricane in the next few days, potentially threatening more U.S. oil facilities.

Latest comments

80$ is coming with vaccine.
LOL Saudi, what are they going to do, stop pumping oil entirely and ***themselves completely in the process? They are now already pumping at half the rate they did beginning this year. Sounds to me more like a desperate threat out of frustration.
Hey after 8 weeks of huge inventory declines this shouldn't be a surprise to anyone. It has been pretty obvious (if you read the actual numbers, not news headlines) that supply/demand is in a deficit.
Not sure what Goldman tells their clients, must be the opposite. Every time they do a public broadcast the opposite occurs
when will these interested bla-bla-blabers be forced to be responsible for their predictions?
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.