uploads///Libya crude oil production

Supply Outage in Libya Pushed Crude Oil Futures

By

Updated

Brent and US crude oil futures 

February WTI crude (DWT) (UCO) oil futures contracts rose 2.6% to $59.97 per barrel on December 26, 2017. Prices hit an intraday high of $60.01 per barrel on the same day—the highest level since June 2015. The United States Oil ETF (USO) rose 2.40% to 11.9 on December 26, 2017—the largest oil futures tracking ETF.

Brent crude (BNO) (OIL) oil futures contracts rose 2.7% to $67.02 per barrel on December 26, 2017. Prices hit an intraday high of $67.1 per barrel on the same day—the highest level since May 2015. Prices rose due to the supply outage in Libya and higher compliance with ongoing production cuts.

Article continues below advertisement

Crude oil supply outage in Libya 

On December 26, 2017, militants blew up the pipeline that transports crude oil to the port of Es Sider in Libya. NOC (National Oil Corporation) is a state-owned oil production company in Libya. It said that Libya’s crude oil production fell by 70,000 bpd (barrel per day)–100,000 bpd. It also added that the reasons for the blast weren’t clear.

Waha operates the pipeline. The NOC, Hess (HES), Marathon Oil (MRO), and ConocoPhillips (COP) are stakeholders in Waha. Waha pumps 260,000 bpd of crude oil.

Crude oil (DBO) prices were at a 30-month high. Higher oil prices favor energy producers (RYE) like Whiting Petroleum (WLL) and Newfield Exploration (NFX). 

Wall Street’s performance 

The NASDAQ (QQQ), S&P 500 (SPY) (SPX-INDEX), and Dow Jones Industrial Average Index (DIA) fell 0.3%, 0.1%, and 0.03%, respectively, on December 26, 2017.

The IT (XLK) (VGT) and utilities (XLU) (VPU) sectors dragged SPY the most on December 26, 2017. However, the energy (XLE) (VDE) and real estate (VNQ) (IYR) sectors supported SPY the most on December 26, 2017.

Series overview 

In this series, we’ll discuss US crude oil inventories, US crude oil refinery demand, gasoline demand, and some crude oil price forecasts.

Advertisement

More From Market Realist