Oil rises with Libya's declaration of force majeure
Oil prices jumped on Tuesday after Libya announced force majeure on part of its supply, but a total increase in OPEC production and a slowdown in demand are limiting the market's rise.
Brent crude <LCOc1> was up 41 cents, or 0.5 percent, from a last close to $ 77.71 a barrel by 0217 GMT. US WTI rose 57 cents, or 0.8 percent, to $ 74.51 a barrel.
"The power struggle in Libya between the internationally recognized Tripoli-based National Oil Corporation (NOC), which controls export sales, and the Benghazi-based National Oil Corporation (NOC), which controls the infrastructure, are now in control," said Stephen Ines, head of Asia-Pacific trading at Uganda's Futures Brokerage. .. erases the planned increase of OPEC and the Alliance (non-OPEC exporting countries). "
A Reuters survey showed on Monday that OPEC production increased 320,000 bpd in June from May. Total production in June is the highest since January 2018.
The National Oil Corporation in Libya announced the case of force majeure in the loading of the ports of Zouitina and Al-Harika yesterday, resulting in production losses totaling 850 thousand barrels per day due to the closure of fields and ports in the east of the country.
Oil traders see US production, which has increased 30 percent in the past two years to 10.9 million bpd, filling the shortfall caused by some supplies.
In general, analysts said OPEC's production policy as well as the disruption of unplanned supplies are now the main driver of prices.
"The level of OPEC production - pumped Saudi Arabia, Iraq, the United Arab Emirates and Kuwait (and non-Opec) surplus energy - and the involuntary disruption of production in Libya, Venezuela and Iran will be two more important engines for crude prices in the near term," Goldman Sachs said in a note published late on Monday. "He said.
Meanwhile, slowing demand, which could end years of record high crude demand, has become a concern.
Barclays said: "Demand growth for US oil slowed sharply to 385,000 bpd in April, compared with growth of 730,000 bpd in the first quarter."
In Asia, the world's largest oil consuming region, sea-bound oil imports have been falling since May as consumers are reluctant to pay for rising costs and after a widening trade dispute between the United States and China has hit the economy.