- Libya Unrest Pushes Oil Price to $65
Oil price hits $65.72 per barrel on Monday as two crude oil production bases began shutting down in Libya amid a military blockade.
Brent crude oil, against which Nigerian oil is priced, rose by 0.8 percent to $65.72 a barrel on Monday before dropping 1.03 percent on Tuesday to $64.53.
While the US West Texas Intermediate Crude (WTI) climbed by 0.7 percent to $58.58 per barrel before moderating to $57.97 during Asian trading session on Tuesday.
On Sunday, forces loyal to Khalifa Haftar closed main production pipeline to force two major oilfields in Southwest region of the country to start shutting down operation as national output dropped to a faction of its normal level.
Despite the drop in Libya supply, experts believe the bullish run can’t be sustained as non-OPEC producers continue to disrupt OPEC’s strategy.
“The oil market remains well supplied with ample stocks and a healthy spare capacity cushion. In other words, the bullish price impact may prove to be fleeting,” said Stephen Brennock of oil broker PVM.
“We expect the current scale of outages to be fairly short-lived … as there is limited upside for Haftar to slow the country’s oil revenues to a trickle,” said Amrita Sen, chief oil analyst at Energy Aspects.
“The current closures are clearly a power play aimed at boosting Haftar’s leverage amid international efforts to broker peace in the country.”
