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The Single Most Bullish Indicator For Oil

The Single Most Bullish Indicator For Oil

Crude futures saw some headwinds…

Eastern Forces Kill Senior Al Qaeda Commander In Southern Libya

Libya pickup

Eastern Libyan forces, who launched earlier this week a military operation in Libya’s south to fight extremists and secure oil facilities, have killed a senior operative for Al Qaeda, a spokesman for the eastern Libyan forces said on Friday.

The Libyan National Army (LNA)—based in the eastern city of Benghazi and led by eastern strongman General Khalifa Haftar—killed Abu Talha al-Libi, a commander in Al Qaeda in the Islamic Maghreb (AQIM) and two other militants, including one Egyptian, Reuters quoted LNA spokesman Ahmed Mismari as saying on Friday.

Libya’s southwest, where the senior Al Qaeda commander was killed, is being used by extremists to launch attacks in the country and in the neighboring countries in North Africa. The same area is also home to the largest oil field in Libya, Sharara, which has been closed since early December, due to security breaches by armed groups.

On Tuesday, the LNA said that they had started a military operation to secure oil sites and facilities in Libya’s south, where Sharara is located.

Sharara’s shutdown will result in daily production losses of 315,000 bpd, plus a loss of 73,000 bpd at the El Feel oil field because it depends on Sharara for electricity supply, Libya’s internationally recognized National Oil Corporation (NOC) said last month, noting that the “combined daily cost to the Libyan economy of this unnecessary shutdown” is US$32.5 million.

Related: Low Oil Prices Are Not The Only Problem For The Permian

According to NOC, “Oil production will now only restart at Sharara after alternative security arrangements are put in place.”

Libya’s crude oil production and exports have been severely disrupted since early December due to port closures courtesy of bad weather as well as security incidents and issues at Sharara.

As a result, Libya’s crude oil production in December plunged by 172,000 bpd from November—to 928,000 bpd from 1.1 million bpd, according to OPEC’s secondary sources in the cartel’s Monthly Oil Market Report released on Thursday. The drop in Libya’s oil production last month was the second steepest decline among OPEC producers after Saudi Arabia, which cut production by 468,000 bpd from November to 10.553 million bpd in December.

By Tsvetana Paraskova for Oilprice.com

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