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The Libyan crude oil pipeline blown up on Tuesday will take about a week to repair, the chairman of Libya’s National Oil Corporation (NOC) said on Wednesday.
On Tuesday, an explosion on the Zaggut to Es Sider oil pipeline in eastern Libya occurred, NOC has confirmed. The pipeline transports crude oil to Libya’s largest oil export terminal, Es Sider. Although the pipeline operator, Waha Oil Company, immediately diverted production to another pipeline, NOC expects production losses of 70,000 bpd to 100,000 bpd, Libya’s state oil corporation said on Tuesday.
The news of the Libyan oil pipeline blast sent WTI briefly above $60 a barrel on Wednesday.
Also on Wednesday, NOC’s chairman Mustafa Sanalla told Reuters in a written reply to questions that “It is estimated that the repair will take about one week from today.”
“This will not have a major effect in the marketing program, only a little change,” Sanalla noted.
As of Wednesday, crude oil cargoes at Es Sider were loading as usual, trading sources told Platts. There is a lot of oil in stock at the port, and immediate delays are unlikely, a Mediterranean sweet crude trader said.
“Production is reduced but we haven’t heard yet about how it will affect January loadings,” the trader told Platts.
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Meanwhile, Libya’s total crude oil production dipped to 950,000 bpd on Wednesday, down from 1.08 million bpd as of December 18, a person with direct knowledge of the matter told Bloomberg.
Although Libya has agreed to cap its 2018 oil production at the 2017 levels as part of its contribution to the OPEC production cut pact, the country has been struggling to raise its production significantly above 1 million bpd—the level it reached this summer, for the first time since 2013.
This fall, several outages at Libya’s biggest oil field, Sharara, kept more than 230,000 bpd off the oil market for periods ranging from a couple of days to two weeks.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
Of course it was supposed to come into balance by the end of this year, and now its mid year or end of year 2018, and with prices pushed to $60 plus a barrel for WTI U.S. production will no doubt outstrip the highest estimates, but who knows? Maybe Russia and all these OPEC countries will idle even more millions of barrels of production to keep the price around $60 or higher, even if their is still a glut of oil? $60 is a fantastic place for the price to be for the USA. Its not high enough to choke of economic growth, and it means with production cost going down the oil industry can recoup billions of dollars to both cover investment cost, and make a oodles of money. It also keeps subsidized renewables in the game and gives them a window to keep gradually increasing their market share of the energy market and bringing down cost until someday they are even cheaper than oil. So despite the fact that $60 a barrel oil is absurd from a supply and demand point of view prices at this level are nearly perfect for the USA for 2018.