Libya’s crude oil supply outage
On Tuesday, December 26, 2017, militants blew up the oil pipeline that transports crude oil to the port of Es Sider in Libya. The NOC (National Oil Corporation) said that Libya’s crude oil production dropped by 90,000 bpd (barrel per day). NOC is a state-owned oil production company in Libya. The supply outage supported Brent (BNO) and US crude oil (USO) prices on December 26, 2017. Prices hit multiyear highs.
Waha operates the crude oil pipeline that exploded on December 26, 2017. The NOC, Marathon Oil (MRO), Hess (HES), and ConocoPhillips (COP) are stakeholders in Waha. Waha pumps 260,000 bpd (barrels per day) of crude oil.
On December 27, 2017, the NOC said that the repair of this pipeline would take one week. The pipeline should be operational from early January 2018. The decline in supply outage would pressure oil (USO) prices.
Libya’s crude oil production
Libya’s crude oil production increased by 20,000 bpd (barrels per day) to 980,000 bpd in November 2017 compared to the previous month, according to the EIA. The production also increased by 395,000 bpd or 68% year-over-year. Libya’s crude oil production was near a four-year high.
Libya and production cuts
Next, we’ll discuss how OPEC’s spare crude oil production capacity impacts oil prices.