While oil prices responded upward this week on API data, they were also responding to events in Libya, where protests are threatening oil output ahead of hoped-for December elections, which have everything to do with who will get to control of which part of the oil industry.
If you were monitoring the drama that has been unfolding over the top position at the Libyan National Oil Company (NOC) over the past 10 days, much will have become clear. The long-serving NOC head, Mustafa Sanalla, was “suspended” by GNU Prime Minister Abdul Hamid Dbeibah, at the insistence of Oil Minister Mohamed Oun. On September 5th, Sanalla was reinstated as NOC board chairman. Only a day later, the Oil Ministry issued a statement saying (again) that it recommended Sanalla’s dismissal.
Oun is competing for more control over the country’s oil and sees Sanalla as too powerful. It appears that the GNU prime minister was attempting to divert Oun by paying temporary lip service to his request to get rid of Sanalla, only to reinstate him.
While this is unfolding, someone is seeing to it that protests are being organized against Sanalla--protests that threaten Libya’s output. So far, there have been protests at the Es Sider terminal and the Marsa el-Hariga terminal (both in the east). At the first, protesters are calling for Sanalla’s removal. At the moment, they are demanding jobs. We expect more protests as this power play continues…