Protesters in Libya force closure of one of the country’s biggest oilfields, while tensions mount over Israel-Gaza war
04 January 2024 - 08:16
byAndrew Hayley and Jeslyn Lerh
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Singapore — Oil prices rose on Thursday, adding to solid gains in the previous session on persisting concerns about Middle Eastern supply after disruptions at a field in Libya and heightened tension over the Israel-Gaza war.
Brent crude rose 38c, or 0.5%, to $78.63 a barrel by 4.40am GMT, while West Texas Intermediate (WTI) futures rose 52c, or 0.7%, to $73.22.
Both benchmarks rose about 3% on Wednesday to settle higher for the first time in five days, with WTI recording the biggest daily percentage gain since mid-November.
“A confluence of headlines around further tensions in the Red Sea and a full shutdown of Libya’s Sharara oilfield from local protests have renewed concerns about global oil supply disruptions,” said Yeap Jun Rong, market strategist at IG.
The oilfield, one of Libya’s biggest, can produce as much as 300,000 barrels a day and has been a frequent target for local and broader political protests.
On Tuesday, Hamas’ deputy leader Saleh al-Arouri was killed in an air strike in Beirut — the first to hit the Lebanese capital in almost three months of almost daily fire between the Israeli military and Iran-backed Hezbollah that had been confined to the border region.
Shipping concerns in the Red Sea lingered after Yemen’s Iran-backed Houthis said on Wednesday they had “targeted” a container ship bound for Israel. US Central Command said the militant group had fired two anti-ship ballistic missiles in the southern Red Sea the previous day.
The market was also supported by data from the American Petroleum Institute, which showed US crude stocks fell by 7.4-million barrels in the week ended December — double the drawdown forecast by analysts in a Reuters survey.
Weekly data from the Energy Information Administration, the statistical unit of the US department of energy, is due at 4pm GMT on Thursday, delayed by a day due to the New Year’s holiday on Monday.
Opec said on Wednesday that co-operation and dialogue within the wider Opec+ producer alliance will continue, after member Angola said last month it would leave the bloc.
A meeting of the group has been announced for February 1 to review implementation of its latest oil output cut.
Analysts at Goldman Sachs expect Brent to range between $70 and $90 a barrel in 2024 based on flexible Opec+ supply, a low risk of recession and opportunistic purchases by China and the US for their strategic petroleum reserves.
Geopolitical risk scenarios will remain an important upside risk to the forecast, the analysts added in a note to clients on January 3.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Oil extends gains on Middle East supply concerns
Protesters in Libya force closure of one of the country’s biggest oilfields, while tensions mount over Israel-Gaza war
Singapore — Oil prices rose on Thursday, adding to solid gains in the previous session on persisting concerns about Middle Eastern supply after disruptions at a field in Libya and heightened tension over the Israel-Gaza war.
Brent crude rose 38c, or 0.5%, to $78.63 a barrel by 4.40am GMT, while West Texas Intermediate (WTI) futures rose 52c, or 0.7%, to $73.22.
Both benchmarks rose about 3% on Wednesday to settle higher for the first time in five days, with WTI recording the biggest daily percentage gain since mid-November.
“A confluence of headlines around further tensions in the Red Sea and a full shutdown of Libya’s Sharara oilfield from local protests have renewed concerns about global oil supply disruptions,” said Yeap Jun Rong, market strategist at IG.
The oilfield, one of Libya’s biggest, can produce as much as 300,000 barrels a day and has been a frequent target for local and broader political protests.
On Tuesday, Hamas’ deputy leader Saleh al-Arouri was killed in an air strike in Beirut — the first to hit the Lebanese capital in almost three months of almost daily fire between the Israeli military and Iran-backed Hezbollah that had been confined to the border region.
Shipping concerns in the Red Sea lingered after Yemen’s Iran-backed Houthis said on Wednesday they had “targeted” a container ship bound for Israel. US Central Command said the militant group had fired two anti-ship ballistic missiles in the southern Red Sea the previous day.
The market was also supported by data from the American Petroleum Institute, which showed US crude stocks fell by 7.4-million barrels in the week ended December — double the drawdown forecast by analysts in a Reuters survey.
Weekly data from the Energy Information Administration, the statistical unit of the US department of energy, is due at 4pm GMT on Thursday, delayed by a day due to the New Year’s holiday on Monday.
Opec said on Wednesday that co-operation and dialogue within the wider Opec+ producer alliance will continue, after member Angola said last month it would leave the bloc.
A meeting of the group has been announced for February 1 to review implementation of its latest oil output cut.
Analysts at Goldman Sachs expect Brent to range between $70 and $90 a barrel in 2024 based on flexible Opec+ supply, a low risk of recession and opportunistic purchases by China and the US for their strategic petroleum reserves.
Geopolitical risk scenarios will remain an important upside risk to the forecast, the analysts added in a note to clients on January 3.
Reuters
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.