Oil Rises as Libya Fighting Flares Up Before OPEC Meetsby
Production freeze among issues to be discussed by OPEC: Iraq
Suncor Energy restarts oil-sands operations as wildfires ease
Oil rose as fighting erupted near Libya’s biggest crude-shipping port and OPEC delegates prepared to meet this week in Vienna to assess output.
Libya’s Petroleum Facilities Guard captured a town near the Es Sider and Ras Lanuf oil-loading terminals after fierce clashes with Islamic State militants. Strife in Nigeria and wildfires in Canada have also disrupted output. The Organization of Petroleum Exporting Countries will discuss a possible output freeze when the group gathers June 2, said Iraq’s Deputy Oil Minister Fayyad Al-Nima, who will head his nation’s delegation.
“All these different supply outages around the world are impacting the supply demand balance,” John Auers, executive vice president at Turner Mason & Co. in Dallas, said by phone. “We are sort of in a holding pattern: a tug of war between the $45 and $50 level.”
West Texas Intermediate for July delivery gained as much as 39 cents to $49.72 a barrel and was 27 cents higher at $49.60 as of 12:59 p.m., when trading stopped on the New York Mercantile Exchange without a settlement because of the Memorial Day holiday. The contract lost 15 cents to close at $49.33 on Friday. Total volume traded was about 86 percent below the 100-day average.
Brent for July settlement, which expires Tuesday, rose 44 cents, or 0.9 percent, to close at $49.76 a barrel on the London-based ICE Futures Europe exchange. Prices lost 27 cents to $49.32 on Friday. The global benchmark closed at a 16-cent premium to WTI. The more-active August contract rose 41 cents to $50.36. It was also a holiday in London.
Oil has surged more than 85 percent since slumping to a 12-year low in February on signs the worldwide surplus is easing amid declining production from the U.S. and disruptions around the world.
Libyan production has fallen to less than 400,000 barrels since armed groups attacked terminals in late 2014, closing them to oil exports, according to data compiled by Bloomberg. The country pumped as much as 1.6 million barrels a day of crude before the 2011 rebellion that ended Moammar Al Qaddafi’s 42-year rule.
Nigerian crude output has dropped to the lowest level in 27 years as militants increased attacks on pipelines in the Niger River delta. Fires that began early May in Fort McMurray shut about 1.2 million barrels a day of production in Canada’s oil-sands region.
OPEC is unlikely to reach any agreement to limit output when it meets Thursday as the group sticks with Saudi Arabia’s strategy of squeezing out rivals, according to analysts surveyed by Bloomberg. In Canada, Suncor Energy Inc. restarted oil-sands operations in northern Alberta as wildfires eased amid cooler weather.
Rigs targeting crude in the U.S. dropped by two to 316 through May 27 after no change the previous week, according to data from Baker Hughes Inc. on Friday. Companies have idled more than 1,000 machines since the start of last year.
- United Arab Emirates Economy Minister Sultan Al Mansoori joined forecasters looking for $60 crude this year with demand and production moving more in line.
- Offshore oil drillers operating in Norway warn that a possible strike over wages could deepen the worst market downturn in a generation.
- Speculators reduced bets on falling WTI prices to the lowest level in 11 months, according to data from the Commodity Futures Trading Commission.
- Saudi Arabia net foreign assets fell for a 15th consecutive month, declining 1.1 percent in April to $572 billion, the lowest level in four years.
- Nigeria will seek talks with leaders of the oil-rich Niger River Delta region to end recent violence affecting production, President Muhammadu Buhari said Sunday in a national broadcast.