By Nigar Abbasova
World oil prices restored positive dynamics and rose almost 2 percent on September 19 amid the clashes in Libya, resulted in raised concerns that efforts to restart crude exports could be disrupted, as well as the statement of Venezuelan President Nicolas Maduro that OPEC and non-OPEC states were close to reaching an output freeze deal to stabilize the “black gold” market.
International benchmark crude futures were trading at $46.54 per barrel recording an increase of 77 cents, or 1.7 percent, from its previous close, while U.S. WTI crude was up 78 cents, or 1.8 percent, to stand at $43.81 a barrel.
Being seriously affected by the collapse in prices, triggered by glut in the market, Venezuela is considered to be one of the obvious supporters of the deal, which is expected to put ceilings on oil output.
Libya, with Africa's largest oil reserves estimated at 48 billion barrels, has not managed to launch the planned loading of tankers in Ras Lanuf port due to ongoing clashes between supporters and opponents of the central authority. The country has exported only a few tankers of crude in recent months. The country produced over 1.6 million barrels a day at its peak, but its production stood at only around 300,000 barrels a day in August. A resumption of exports from long-closed ports in Libya would be a major development for the oil market ahead of Algeria talks.
The prices reached the lowest level for the month last week decreasing by almost 5 percent, due to intentions of such countries as Libya and Nigeria to increase the volume of oil export. Iran, OPEC’s third country for the volume of proven crude oil reserves, is also increasing its export. Crude exports from the country jumped 15 percent more than 2 million barrels per day within a month, bringing Tehran closer to the pre-sanctions shipment level.
Moreover, the number of oil rigs in the USA increased twofold for the last week up to 416, according to Baker Hughes. Experts say that despite the fact that the current figure is much lower than the peak of 1,609 rigs fixed in 2014, the constant increase in the number of rigs may signal that producers in the USA adapted to the price standing at $40-50 and are not intended to dampen their activity.
The upcoming Algeria meeting remains one of the determining factors in the oil market. OPEC Secretary-General Mohammed Barkindo said that OPEC members may call an extraordinary meeting to discuss oil prices if they reach consensus at an informal gathering in Algeria.
Nigar Abbasova is AzerNews’ staff journalist, follow her on Twitter: @nigyar_abbasova
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