U.S. crude oil futures surged nearly 2% on Thursday, rebounding after a two-day decline as the market assessed Libya’s significant production disruptions. According to Reuters, Libya halted around 700,000 barrels per day on Thursday and ceased exports at multiple ports. Rapidan Energy estimates these production disruptions could reach up to 1 million barrels per day and last for several weeks.
In parallel, Iraq is set to decrease its oil output from 4.25 million barrels per day in July to approximately 3.9 million barrels per day in September, surpassing its OPEC+ quota of 4 million barrels per day.
Thursday’s energy prices reflected these dynamics:
– West Texas Intermediate October contract closed at $75.86 per barrel, up $1.34, or 1.8%, gaining 5.8% year-to-date.
– Brent October contract rose to $79.84 per barrel, up $1.19, or 1.51%, with a year-to-date increase of 3.7%.
– RBOB Gasoline September contract was priced at $2.24 per gallon, up over 3 cents, or 1.58%, advancing 7% year-to-date.
– Natural Gas September contract was at $2.14 per thousand cubic feet, up more than 4 cents, or 2%, but down 14.8% year-to-date.
Bob Yawger from Mizuho Securities highlighted that production cuts in Libya, geopolitical tensions in the Middle East, and EIA crude storage at an eight-month low are driving prices up. However, he warned that sustained high prices might prompt OPEC+ to increase supply by October.
Libya’s political turmoil, involving threats from its eastern government to shut down production, has led to significant disruptions. With Libya producing about 1.2 million barrels per day, mainly for global exports, Matt Smith from Kpler noted that the U.S. benchmark could gain the most from these disruptions, as it substitutes Libyan supply for European buyers.
Despite a 3% jump in U.S. crude on Monday due to Libyan disruptions, prices pulled back amid unclear outage extent and reduced demand in China. U.S. crude has been oscillating between $71 and $80 per barrel this month, with price movements driven by Middle Eastern tensions and faltering Chinese demand.
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Original Story https://www.cnbc.com/2024/08/29/crude-oil-prices-today.html
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