Crude prices up
By Sara Israfilbayova
World oil prices rise on July 3, investors are playing out news that the Libyan oil company NOC has declared force majeure in loading oil in two ports.
U.S. light crude jumped 1.3 percent, to $74.93 a barrel, its highest since November 2014, before easing back to $74.79, up 85 cents, while Benchmark Brent crude oil was up 70 cents at $78.00, Reuters reported.
Traders are worried about possible interruptions in oil supplies after news from Libya. On July 2, the National Oil Corparation of Libya (NOC) declared force majeure due to a blockage in the shipment of raw materials from Zueitina and Hariga ports. At the same time, NOC warned that oil production in Libya could collapse by 850,000 barrels per day if the blockade of the eastern ports continues.
Investors also assess the statement of the Abu Dhabi National Oil Company (ADNOC) on the readiness to increase oil production in accordance with the recommendations of OPEC.
Investors evaluate the data on oil production in Saudi Arabia and the possible consequences of the trade war between the U.S. and China for the world economy.
According to experts, Saudi Arabia in June 2018 increased oil production by 330,000 barrels per day, to 10.3 million barrels per day. This is the largest increase in production in the kingdom since July 2013.
Saudi Arabia had a sufficient reserve of free capacities, which allowed it to promptly increase production.
OPEC and non-OPEC producers reached an agreement in December 2016 to curtail oil output jointly and ease a global glut after more than two years of low prices. OPEC agreed to slash the output by 1.2 million barrels per day from January 1.
Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from January 1, 2017.
OPEC and its partners decided to extend its production cuts till the end of 2018 in Vienna on November 30, as the oil cartel and its allies step up their attempt to end a three-year supply glut that has savaged crude prices and the global energy industry.
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Sara Israfilbayova is AzerNews’ staff journalist, follow her on Twitter: @Sara_999Is
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