CO1 5-day chart Source: Bloomberg
Libya’s national oil company confirms 660 MBO shipment from Hariga port
Oil prices have resumed a familiar behavior: volatility. In the past five days or so, WTI has traded below $46.50 and pushed toward $49 on the 18th and 19th, with a downtick today below $48.
Analysts cite unknowns in Canada and an agreement between opposing factions in Libya. Some of the disrupted supply from Libya will come back online as the internationally recognized government in the west and a rival government in the east came to an agreement today to resume crude oil shipments from the port of Marsa al-Hariga.
A tanker left the port today carrying 660 MBO of crude oil, Libya’s National Oil Company said in a press release.
The rival governments formed following the 2011 ouster and death of Moammar Gadhafi. A U.N.-backed peace effort resulted in a new government installed in Tripoli, but the east has yet to recognize it, and instead has tried to develop its own stream of revenue by exporting oil via its own oil company. The group in the east controls the Hariga port, and closed it in retaliation for successful efforts from the U.S. and the government in Tripoli to block its own exports of oil.
The press release today reported Libya’s NOC and the eastern group’s oil company signed a memorandum of understanding asking the House of Representatives in Tripoli and the Presidency Council to “unify the oil sector.”
The compromise was made in order to “avoid damage to pipelines, avert a financial crisis, and ensure power supplies are not interrupted further… (as well as to) restore the confidence in the Libyan (crude oil) grades.”
Oil prices have gained support in recent weeks from a number of supply outages around the world, including those in Libya. The country’s production is less than a quarter of its 1.5 MMBOPD capacity as it struggles with rebuilding, but more oil may leave Libya’s shores as the rival political groups begin to cooperate more broadly on oil exports.
Marsa al-Hariga is located near Tobruk, in the east of Libya
