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In a poorly timed move for the oil markets, Libya announced today that it has resumed oil production from the country’s largest oilfield, Sharara.
The oil production will gradually increase, according to two field engineers, cited by Reuters. NOC has not officially confirmed the restart.
The field had stopped producing on July 19 after an unidentified group had shutdown a pipeline valve, according to a statement from Libya’s NOC at the time. Production was resumed and the force majeure lifted on July 22, but yet another pipeline valve was closed on July 31, triggering another force majeure.
The field closures and reopenings in rapid succession highlight the tumultuous state of Libya’s oil industry.
Sharara has a capacity of 340,000 barrels per day, but prior to the most recent force majeure, the field had been pumping at a rate of 290,000 barrels per day.
The restart comes a day after oil prices dropped to their lowest level in seven months after a surprise build in US oil inventories added onto the US/China trade war that saw China let its currency devalue.
Saudi Arabia approached OPEC today in an effort to stop the oil price slide, intimating to its OPEC colleagues that it was open to all options, according to an unnamed Saudi official quoted by Bloomberg. Saudi Arabia also announced on Thursday that it would keep its oil exports below the 7-million-bpd mark at least through September to drain global oil supplies.
Oi prices had rallied on the Saudi news, with WTI trading at $52.79, up $1.70 (3.33%) on the day. Brent crude was trading at $57.68, up $1.45 (+2.58%) on the day at 4:35pm EST.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.